Gregory E. Robinson, P.C.

Restrictive Covenant Agreements are used for multiple purposes, with the most common one being Employment Agreements. However, Restrictive Covenant Agreements can be used in other business situations, including but not limited to, Independent Contractor Agreements, joint ventures, cooperative agreements between different business entities, or even when contemplating selling a business.  Some common types of restrictive covenants are:

• Non-Compete Agreements;
• Non-Disclosure Agreements; and
• Non-Solicitation Agreements

An agreement can include one or multiple restrictive covenants.

Consideration

Using the “independent consideration” doctrine, a restrictive covenant agreement cannot be imposed on an existing relationship, unless the party subject to the agreement receives something of value in return for executing the agreement.  This consideration could include employment. However, for current employees or if there is a current business relationship, signing a restrictive covenant agreement in exchange for continued employment or a continued business relationship may not be enough.  In an employment relationship, other benefits like an increase in salary, bonus or promotion may be required.  For other types of relationships, a new overall agreement may be necessary.  The issue of consideration differs from state to state.

If your business needs some type of Restrictive Covenant Agreement, our attorneys have experience drafting such agreements.  If you are presented with such an agreement, we can review the agreement and advise you as to whether the agreement is appropriate for your situation.

Once your business is created or organized, the owners of the business, whether they are members of a Limited Liability Company or shareholders of a Corporation, must have an agreement as to how the business entity is going to act. For a Limited Liability Company, this agreement is called an “Operating Agreement” and for a Corporation, the agreement is called the “By-Laws.” Such an agreement is necessary even if there is only one member or shareholder.

When there is more than one owner of a business, another type of agreement, known as a Buy/Sell Agreement may also be necessary. There are typically other issues to address with a Buy/Sell Agreement, such as the mechanics of funding the purchase price upon the death or disability of one of the shareholders.

The attorneys at Gregory E. Robinson, P.C., have the experience to assist you in determining what documents need to be created for your specific business and will work with you to accomplish your business goals.

As a business owner himself, estate planning attorney Greg Robinson understands the importance of protecting the future success of your business. We understand the time and attention to detail you have invested in your company. Your voice will be heard.

Our dedicated team of professionals will analyze your individual company goals, and create a personalized business succession plan to ensure your vision for your company will continue for as long as necessary, and still meet the needs of your named successors.

A non-compete agreement is a contract which states that a person or entity will not engage in direct competition with an entity that the first person or entity has a relationship with once that relationship terminates. Although most often it is used in an employment situation, it can be used when the parties have some other type of relationship. It is designed to prevent a person or entity from using the knowledge and skills learned through the business relationship to benefit another company offering the same type of services or product. Non-compete agreements can thus protect the integrity and success of a business. However, used incorrectly, these agreements can open businesses to lengthy and costly litigation.

Specifics of A Non-Compete Agreement
It is only natural to protect your company from being exploited by others wishing to gain an unfair advantage by draining your company of its uniqueness and competitive edge or from employees sharing sensitive or confidential information to competitors. It is important to understand some key issues about this topic, including but no limited to, what types or relationships are ripe for a non-compete agreement, what type of provisions should be includes and are they enforceable, and what are the limitations of such agreements.

Limitations
Agreements with no geographic limitations may be deemed unreasonable, overbroad, or unlimited in scope, and be frowned upon. It is recommended that non-compete agreements cover only a specific radius or area. In addition, as with the issue of geographic coverage, agreements with no time limit are frowned upon, and are less likely to be upheld in court.

In addition, as with the issue of geographic coverage, agreements with no time limit is frowned upon, and less likely to be upheld in court.

Small business owners and prospective small business owners have many choices regarding how to organize their business, including:

• Limited Liability Company;
• Corporation;
• Sole Proprietorship; or a
• Partnership.

Each of these forms offers specific benefits and advantages as well as potential disadvantages and pitfalls, depending on your goals. When considering which business form is best suited to your needs, business owners need to keep in mind how each of these different entities will affect their liability and tax implications.

Consulting a corporate law firm well-versed in these areas will help you select the best option for your needs and safeguard you from unnecessary liability. The commercial attorneys at Gregory E. Robinson, P.C., are very familiar with the needs of business owners. Our firm can assist you in keeping your business in compliance with the various statutes and regulations in order to be afforded the protections of your selected business structure.

After your business entity is formed, we are here to provide continued assistance for all your business’ legal needs.