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  4.  | Can Your Business Enforce a Noncompete Agreement With a Worker?

Can Your Business Enforce a Noncompete Agreement With a Worker?

| May 4, 2021 | Business Litigation

Businesses often have unique ways of operating that can help make them more competitive or profitable. Trade secrets like special formulas, secret recipes, confidential client lists and even unique manufacturing processes can give one business a real edge over their competition. 

Protecting those secrets is crucial to the company’s continued success. Unfortunately, every employee who has access to trade secrets is a possible source of risk and vulnerability for the company. Workers could potentially sell that information to competitors or even use it to start their own business in the future. 

Can your company require its staff members to sign noncompete agreements? Can you enforce the agreement through the Hawaii court system if that employee goes to work for another business in your industry or tries to start their own company?

Hawaii has specific laws addressing restrictive covenants

Restrictive covenants like noncompete agreements can prevent workers from capitalizing on their experience or education. They can have a chilling effect on fair competition and undermine the ability of workers to seek gainful employment. 

Hawaii is now one of several states that refuses to enforce noncompete agreements. In fact, the state doesn’t just use legal precedent but actually has a law that makes noncompete agreements unenforceable. Although any business can add restrictive covenants to their employment contracts, they will have few options to enforce that agreement if a worker does not comply with it. 

Getting help drafting workplace contracts or learning about your options as an employer can help you make better hiring and business choices that protect your company and its trade secrets.