A stay away agreement, also known as a non-compete agreement, is a legal contract between two parties in which one agrees not to enter into competition with the other for a certain period of time and within a specific geographic area. These agreements are often used in business transactions, between employers and employees, and during the sale of a business.
The purpose of a stay away agreement is to protect a company`s business by preventing its employees or former employees from using confidential information and trade secrets to compete with the company. A stay away agreement may also restrict an employee`s ability to work for a competitor or start a competing business for a specified period of time after leaving their current employer.
These agreements are generally enforceable if they meet certain requirements, such as being reasonable in scope, duration, and geographic area. They must also be supported by valuable consideration, such as a job offer or a severance package. However, the enforcement of stay away agreements varies by state, and some states have stricter rules regarding their use.
There are several potential drawbacks to stay away agreements. They can limit an employee`s job opportunities and may prevent them from using their skills and expertise in their chosen field. Employers may also face challenges in enforcing these agreements if the restrictions are deemed too broad or unreasonable.
Overall, stay away agreements can be useful tools for protecting a company`s business interests, but they must be carefully crafted and properly executed to be effective and enforceable. Employers should seek legal counsel to ensure their stay away agreements are valid and legally enforceable.