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A non-compete agreement in Rhode Island is a legal document using restrictive covenants that allows companies to protect their business interests and trade secrets. These agreements obtain a written promise from an employee or independent contractor that they will not engage in competitive behavior once the employment relationship ends. Although Rhode Island allows and enforces non-competition agreements, it also specifically limits how they may be used.
Such agreements may be a stand-alone contract. Employment agreements may also have non-compete clauses within them. Generally, non-compete agreements work best when used with non-disclosure agreements (also known as confidentiality agreements) and non-solicitation agreements.
Before creating non-compete agreements, employers should seek legal advice from a law firm practicing employment law to better understand enforceability and the differences between exempt employees and non-exempt employees.
Hiring an independent contractor to work for your Rhode Island business? Download an independent contractor agreement form now!
Effective January 15, 2020, a new law known as the Rhode Island Noncompetition Agreement Act protects trade secrets, confidential information, customer lists, goodwill, and special training. All non-competition agreements must be reasonable in nature, including reasonable in their geographic area and time restriction.
However, there are multiple exemptions. Non-compete agreements cannot be used with:
A non-compete agreement must be reasonable in its time and geographic restrictions. However, given its size, business owners should consult with a law firm to determine a reasonable geographic reach in New England. This helps ensure that public policy is not violated if a former employee must be sued.
Protect your Rhode Island business by also using a Rhode Island non-disclosure agreement form. Download a Rhode Island non-disclosure agreement form now!
To write a Rhode Island non-compete agreement, first review the Rhode Island Noncompetition Agreement Act and its restrictions. Include the following clauses:
Both the employer and the employee must sign and print their names. The signatures should be dated. Finally, each party should keep a copy of the completed agreement.
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