Finding the middle ground in non-compete agreements

THE HR AGENDA: Non-compete agreements are an important tool to help protect employers, says Institute for HR Professionals CEO Mayank Parekh. But that doesn't mean they should be used indiscriminately or with overly broad terms.

Speaking on the latest episode of The HR Agenda, Parekh advised that each clause should be bound by time (a specific number of years) and geography.

“It is not forever, just for a specific period to protect the company’s interest and only for areas where the employee was exposed,” he said.

A non-compete agreement is a clause specifying that an employee must not join a competitor for a certain period after they finish their term with the current employer.

Aside from consulting legal experts, his advice to HR professionals is to always provide the employees with the rationale behind the clause. More importantly, it is necessary to convince them of the reasonableness of the clause and find the middle ground that allows some flexibility on the part of the company.

“I would encourage organisations to get the legal support through a non-compete clause, and with the help of a legal counsel to ensure that the clauses stand the test of reasonableness,” Parekh said.

He also stressed that having the ability to talk things through was important, “It should not just be about the rights of both parties but also about communication with employees, that they understand the rationale.”

To follow the discussion, watch the clip below. Or click here for the full episode of The HR Agenda.


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