With the goal of our state to lessen government intervention when it comes to legitimate transactions between individuals and business entities in consonance with laissez faire economics, provisions that are prevalent in employment contracts have become more and more creative, innovative, and at times, even restrictive.
The only requisite and limitation provided by our state is the fact that these provisions present in our employment contracts should be in consonance with and must not run counter or repugnant to the provisions of the Constitution, governing laws, public policy, and good conduct. This means that any provision can actually be made part of an employment contract and can be considered to govern the conduct of the employer and employee and need to be followed to the letter so long as it is not repugnant to any of the enumerated delimitations.
An example of an employment contract provision that has become a staple in every employment contract drafted is the Non-Compete Agreement. A Non-Compete Agreement or more commonly known as a Non-Compete Clause is a provision in an employment contract which espouses the concept that upon an employee’s termination or the severance of his or her employment with the employer. The employee is not allowed to join or be employed with any other business establishment having the same economic interest and field of industry as that of the previous employer.
The Non-Compete Agreement is actually grounded on the principles of fair play and protection of privacy and business interest of the employer upon the dissolution of the employment relationship. The fact that the employee previously had access to private information and business secrets and trade, and that there might be a possibility that such confidential business information may be shared upon being employed with a competitor business entity is what is avoided by such provision.
Usually, the prohibition of being employed with a competitor business establishment on ht employee dismissed or voluntarily resigned is within a period of one year. This means that within such period of time, the former employee is prohibited from being employed with another business entity which is functioning much the same way as that of the former employer or another business entity that may have useful utilization of the information that the former employee acquired.
Non-compliance with said provision may actually compel the former employer to file a cause of action against such employee and even the new business establishment for unfair competition, and appropriate amount of damages may actually be collected.
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