How to protect your business from unfair competition by former employees

We recently wrote about how the tight job market is making it hard for you to find employees (see "Pros, cons of using signing bonuses to attract employees" in our October 2021 issue). One side effect is that even if you can find the workers you need, they may feel they can easily leave and get another job. In the current fluid environment, many of you are understandably concerned about protecting your organization from unfair competition. Here are some methods that can help.

Covenants not to compete

The most obvious step is to have employees sign a covenant not to compete. Certainly, Arkansas made the tool much more employer-friendly when it passed Ark. Code Ann. sec. 4-75-101 in 2015.

Legal standard for enforceability. Under the statute, an enforceable noncompete requires the employer to have a protectable business interest and the agreement to be limited in time and scope in a manner that isn't greater than necessary to defend the interest. The covenant's reasonableness is determined after considering: