Two Agreements Which Are Opposed to Public Policy: Understanding the Scope of their Legality
In the world of business, agreements and contracts are essential instruments used to cement deals, create new partnerships, or preserve existing ones. However, not all agreements or contracts are recognized, and some are considered null and void as they conflict with state or federal laws, or are opposed to public policy. Two types of agreements that fall under this category are the Non-compete Agreement and the Non-disparagement Agreement.
As its name suggests, a Non-compete Agreement is a contract between an employer and an employee that restricts the employee`s ability to work in a similar field or industry after leaving their current job. The goal of this agreement is to protect the employer`s trade secrets, confidential information, and customer relationships. However, these agreements are often viewed as unfair to the employee and a violation of their rights, especially if the restrictions are too broad or unreasonable. For example, if a Non-compete Agreement prohibits an employee from working in the same industry for an extended period, it could prevent the employee from finding work and limit their ability to earn a livelihood.
In the United States, the legality of Non-compete Agreements varies from state to state. Some states allow Non-compete Agreements, but only if they meet certain criteria, such as being reasonable in scope, duration, and geographic area. Other states prohibit them entirely, while some allow them but impose specific restrictions on their use.
A Non-disparagement Agreement is a contract that prohibits one or more parties from making negative or critical comments about the other party or parties involved. Typically, these agreements are used in settlement agreements or severance packages to prevent former employees, contractors, or clients from speaking negatively about the organization in public or online. However, these agreements can be problematic because they can silence individuals and prevent them from sharing their honest opinions or experiences. Moreover, they can be seen as a tool used by organizations to conceal or downplay negative behaviors or scandals.
Although Non-disparagement Agreements are legal in most states, some states have specific laws that limit their use or require them to be drafted in a certain way. For example, some states require that Non-disparagement Agreements be in writing and that the parties involved are given time to review them before signing. Additionally, in some cases, Non-disparagement Agreements can be invalidated if they are too broad or ambiguous.
Agreements and contracts are a vital part of the business world, but not all contracts are enforceable or lawful. Non-compete Agreements and Non-disparagement Agreements are just two examples of contracts that may conflict with state or federal law or be opposed to public policy. It is essential to understand the scope of their legality and relevance before entering into them. As a professional, it is important to always keep the target audience in mind when writing about legal topics. Clarity, simplicity, and accuracy are key when explaining complex legal concepts to a non-legal audience.