Compensation Agreements & Non-Compete Contracts
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Non-compete contract

Compensation Agreements & Non-Compete Contracts

When you’re bringing on new employees or promoting existing employees, there are a host of documents you need them to sign. Many of these forms are related to compensation, some are for the government, and some help you run your company effectively. When you have confidential technology, patents, or processes, you’ll also need signatures and documents. These are things that could severely damage your company if an employee went to work for a competitor. So when you’re hiring or promoting employees who will be privy to private information, you’ll need two things: compensation agreements and non-compete contracts.

When you hire someone new or promote a current member of your staff, they will likely need a new salary and become privy to new confidential information. For this reason, you want these agreements and contracts ready and prepared by experienced corporate law attorneys. You can find them at Tressler & Associates.

What is a Compensation Agreement?

Compensation agreements are always needed, whereas non-compete contracts are highly recommended. For every newly hired or promoted employee, you need to put their new salary or hourly rate in writing. This way, you have documentation proving what wage you should be paying your employees should they claim they are the victim of wage theft. If you’re the employee, you should also want it in writing to protect yourself. As an employee, this agreement supplies you with proof of how much you should be paid if your employer is not properly compensating you.

What Should Be In Compensation Agreements?

Compensation agreements do not replace employment contracts, so what goes into a compensation agreement is everything regarding pay that’s not in the employment agreement. This includes three main things:

  • The parties involved, such as the employer and employee.
  • How the employee will be compensated. For example, whether they will be paid through check or direct deposit, and how often.
  • Whether the pay will be salary-based or paid by the hour.

What is a Non-Compete Contract?

A non-compete contract provides protection to the employer in case the employee resigns or is let go. It’s normal for employees to move on to other positions, but employers need to protect their business by making sure ex-employees don’t take confidential information to their competitors. These contracts give restrictions on where an employee can work for a certain amount of time after resigning. 

What Should Be In Non-Compete Contracts?

A non-compete contract should contain specific instructions. They can be specific about the physical location, such as the city or state. Some businesses are only locally based and have no concerns if an employee works for a company in the same industry that isn’t a competitor. These contracts can specify what companies the ex-employee can’t work for because they are direct competitors. 

With these contracts, you can be as vague or specific as you want, but the vaguer your contract is, the harder it is to enforce. In Tennessee, there are multiple examples of non-compete contracts being too vague to enforce or being downright unreasonable. A non-compete has to allow the ex-employee to find new work with a reasonable amount of challenge. If they don’t, a court will throw out the contract.

When considering what needs to go into a non-compete, our corporate law attorneys make sure to keep the wording as reasonable as possible. Some recommendations usually include naming specific competitors rather than a whole industry, or specific locations your business operates in, rather than everywhere an ex-employee can find work.

Contact Tressler & Associates for Compensation Agreements and Non-Competes Contracts

You want to be able to bring on new employees and promote the best employees without putting yourself at risk. Compensation agreements and non-compete contracts are all about minimizing risk and can offer some protection to your employees as well. They help make sure that everyone is playing fair and making the money they deserve.

To make sure that these documents are solid, without loopholes, vague descriptions, or anything else that can be misunderstood, have a corporate law attorney create them. If you’re an employee worried that your employer is offering you contracts you can’t trust, have a corporate law attorney review them. Contact the corporate law attorneys at Tressler & Associates. We’ll make sure that they cover as much legal ground as you need, without becoming ineffective.


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