We previously talked about why a company would want restrictive covenants, but it isn’t just the company acting. The employees are agreeing to the non-compete, non-solicitation, or non-disclosure provisions, too. As for employees, they need to understand: 1) what they can and cannot do during their employment and afterwards, and 2) why it matters. Their willingness to follow the restrictions in 1 is directly related to their understanding and buy-in to 2. If they think you are just trying to crush their ability to make their mortgage, then they will be more likely to test those boundaries. Then you will spend more time, money, and effort enforcing the agreement. However, if they recognize that you are trying to protect your business, but in a thoughtful, tailored way, they won’t be as likely to give you a one-finger salute. Especially if they can still find a way to make a living without undue burden.
Let’s revisit that Wausau vet. If she says that her employees can’t work anywhere that provides products or services to animals within 100 miles of Wausau, that is awfully burdensome. That means her receptionist can’t move to Green Bay and work at PetCo stocking shelves. But it can make sense that a veterinarian shouldn’t be able to start a new vet service in Rothschild, WI, especially if both were specializing in horses. So we build the restrictive covenants to prevent the latter but allow the former and help the employees know why you aren’t just trying to stop them from making money but to make sure that you can stick around and employ others.
This doesn’t mean you are required to have these restrictive covenants, but they might be able to help you prevent harm from employees who leave your company. Just remember that you need the restrictions to be narrowly tailored and your employees need to understand the what and why as to the restrictions.