Understanding Restrictive Covenant Agreements

Marketing and business are practical endeavors, but they also require a certain leap of faith. Comprehensive restrictive covenant agreements are one way to ease into this new form of business process, as they help create clear delineations between the company, its employees, and its customers. This means that there’s no reason to worry about your former employees stealing your most critical trade secrets or engaging in other behaviors that could undermine the value of your brand. But what is a restrictive covenant agreement? Simply put, it’s an arrangement between an employer and an employee or an independent contractor. It prevents the employee from stealing the company’s customers, trade secrets, and confidential information, as well as from competing against the company for a certain period of time.

A good restrictive covenant agreement should describe the following key aspects: A restrictive covenant agreement also has to be reasonable in order to be enforceable. It needs to be reasonable in scope and duration, as well as in the geographic area where the business operates. For example, when you begin to build up a new business, it’s most common for restrictive covenant agreements to last from one to five years. Often, the duration of these agreements will be shortened as time goes on. Elsewhere, however, you might see longer restrictive covenant agreements – especially for senior executives who have access to a company’s most valued vendors and customers. This is because larger firms depend on non-competition agreements to keep their business opportunities secure.

Shaparak Marketing seeks to provide clients with targeted services that are ideally suited to their individual purposes. For business development in particular, restrictive covenant agreements can help to clarify what businesses are off limits to ex-employees after they’ve left, and what information they can and cannot share with competitors or former customers.