Many types of businesses rely upon non-compete agreements to protect trade secrets and other proprietary information. Non-compete agreements are common in large corporations and may be included in an employment contract or negotiated as a part of a severance package. The national electronics retailer Best Buy reportedly entered into a three-year non-compete in April 2012 when its former CEO left the company. The separation agreement reportedly measured around $4 million with the attached three-year agreement that the former CEO would not work with any competitors
That company changed its policies earlier this year to limit any future non-competes to a one-year duration. Commentators say that many companies seek to make such agreements as broad as possible to protect company interests. But, it is important to note that Ohio business law attorneys are aware that like any contractual agreement, contract disputes involving non-competes may arise.
Best Buy reportedly is expanding its overall use of non-competes in its employment contracts with directors and vice presidents with the company. Commentators say that the electronics retailer is entering into non-competes with a broader range of management personnel—possibly to maintain more stability in its ranks, according to the Star Tribune.
The company stock has seen some steady growth in recent months, according to analysts. Commentators say that with increasing stock prices, more of the executives who are being offered non-competes may be more inclined to sign the pacts as the agreements are based upon future stock awards.
Generally, courts enforce non-compete clauses, but the issues surrounding the topic can be complex. Issues can arise with the scope of individual contracts (like any other type of business agreement). A Cleveland business lawyer can assist a business owner in developing contract strategies in an individual situation, or in litigating a contract dispute, if one should arise.
Source: Star Tribune, “Continued: Best Buy expands noncompete restrictions further down corporate ladder,” Thomas Lee, June 5, 2013