Applicability of the Non-Compete Clause

Applicability of the Non-Compete Clause

A non-compete clause (NCC) is a restrictive contract that deters an employee from engaging in a similar profession after leaving a particular job. The employee must commit that he will not join another firm within a specified period after leaving his previous post (Harris, 2014). Employees gain a lot of information and access to trade secrets. If they join another firm, they might end up sharing all these details hence giving the rival an unfair advantage. Therefore, NCC serves as a deterrent of not sharing sensitive information such as clients list and market penetration tactics. It also deters former employees from sharing trade secrets with a competitor.

The attempt of the HR director to make the software engineer sign the NCC contract is valid. Firstly, the software being sold to the government has a lot of secrecy. Due to the high risks in the digital world, cyber information must be protected. In addition, the Department of Homeland Security (DHS) is a vital organ in managing security threats in the US.  The cyber security software is an essential factor of guaranteeing the security situation in the country. Therefore, the contractor must be keen on protecting the integrity of this software. Information regarding the software must only be shared between DHS and the contractor. When the engineer commits to sign the NCC contract, it is a guarantee that the confidentiality of the software will be protected.

In addition, government contracts are highly competitive and worth huge sums of money. Firms entering into contracts with security organs are vetted thoroughly before the deal is granted. Supplying security materials is also a delicate activity since the contractors engage in activities that influence the country’s security. Therefore, the HR director has to put all the essential precautions in this contract. Since cyber security software can be manipulated, the engineer has to commit that he will not work for any competitor within two years. The integrity of the software will also protect the reputation of this firm hence increasing its chances of securing future contracts. Besides, the integrity of the cyber software can guarantee a long term relationship between the contractor and DHS. This indicates that the HR director is justified to make the software engineer sign the NCC contract.

Protection of the key details regarding the software program will only be guaranteed if the NCC contract is signed. Programming software involves a lot of resources and manpower in a company. Special skills are also used to initiate a fully working software. In addition, the contractor is tasked with the responsibility of providing a cyber-security software that requires a lot of special features. This indicates that the firm’s most important secrets will be activated in its programming. Therefore, the HR director must ensure that this sensitive information is guarded. The NCC agreement is the only means of safeguarding the secrecy of the security software. Deterring the software engineer from working for another firm will protect the intellectual property owned by the contractor.

Additionally, the software engineer might use the trade secrets possessed by the contractor to set up his firm. Since the digital technology market has expanded, the engineer might think of starting a new firm. He might use the sensitive information obtained from the firm to venture into the business of making software’s. This might pose a direct competition to the contractor hence limiting its market outreach. Besides, the engineer might even secure the contract from the DHS by claiming that he was the brain behind the cyber security software. Therefore, the HR director is justified to require the engineer to sign the NCC agreement. This will protect the interest of the contractor since its trade secrets will be secured from the competitors. The software engineer will also not have the liberty to start a new firm in two years (Torry, 2019). This indicates that the market interests of the company will be protected. The contractors will also continue enjoying lucrative contracts from the DHS without worrying about competition from its former software engineer.

The HR director also has to ensure that the contract abides by the state laws to guarantee its validity. It has to be fair to both the contractor and the engineer. An effective date in which the contract begins and the time the software engineer is barred from working for a competitor must be set (Dougherty, 2017). In addition, the agreement must define the geographic boundaries where the engineer is limited from working. Specific details of why the software engineer is being barred from joining another firm must then be listed in the contract. The engineer needs to understand and appreciate the reasons for enacting this agreement. Moreover, details about compensation to the engineer for abiding by the contract must be included. If the HR director meets these requirements, the software engineer must then be willing to comply with the agreement. In case the software engineer breach the contract, the contractor can then file a lawsuit.

References

Dougherty, C. (2017). How Non-Compete Clauses keep Workers Locked in. The New York Times. https://www.nytimes.com/2017/05/13/business/noncompete-clauses.html

Harris, S. M. (2014). Understanding Non-Compete Employment Clauses. https://www.healio.com/orthopedics/business-of-orthopedics/news/print/orthopedics-today/%7Be9ed90a1-9293-417f-a1b1-eb69b2b3da5f%7D/understanding-non-compete-employment-clauses

Torry, H. (2019). Resistance to Non-compete Agreements is a Win for Workers. https://www.wsj.com/articles/resistance-to-noncompete-agreements-is-a-win-for-workers-11558195200