A non-compete agreement is a legal document that prohibits an employee from working for a competitor within a specific period after leaving their current employer. This agreement is commonly used in the Philippines to protect the employer`s business interests and trade secrets.
In the Philippines, non-compete agreements are enforceable as long as they are reasonable in scope, duration, and geographic coverage. The scope refers to the type of business that the employee is prohibited from engaging in. The duration is the length of time the employee is restricted from competing with their former employer. The geographic coverage refers to the area in which the employee is restricted from competing.
Non-compete agreements are typically used for employees who have access to confidential information, trade secrets, or specialized knowledge. For example, an employee who works for a pharmaceutical company may be prohibited from working for a competitor for a certain period after leaving their current employer.
Non-compete agreements are also commonly used in employment contracts for high-level executives, salespeople, and managers. These individuals have access to sensitive information and are in positions to influence the company`s business strategy, making them valuable assets to the company.
It is important to note that non-compete agreements must be reasonable and not overly restrictive. For example, a non-compete agreement that restricts someone from working in their industry for 10 years is likely to be deemed unreasonable and unenforceable in court.
In the Philippines, violating a non-compete agreement can lead to legal action from the employer. The employee may be held liable for damages caused to the employer`s business due to their violation of the agreement.
In conclusion, non-compete agreements are a common tool used by employers to protect their business interests and trade secrets. However, these agreements must be reasonable in scope, duration, and geographic coverage to be enforceable. Employees who sign a non-compete agreement and later violate it may face legal consequences. It is important to consult with a lawyer before signing a non-compete agreement.