Our Multifaceted Experience Provides Many Advantages To Your Business Contracts
At Watrous | Goodwin | Reha, we take pride in protecting our clients’ interests and assets through creatively drafting business agreements of all kinds. With more than 30 years of experience in trade secret disputes, unfair competition claims and other types of business litigation, our attorneys craft business contracts with an eye to issues that a lawyer who engages in a transactional practice only may not be able to identify or address. Here, we are not only car builders, but also certified mechanics who know how to troubleshoot in advance.
Taking the time to protect your company’s tangible and intangible assets is key in any type of transaction, from corporate formation to business sales or acquisition of a business. However, not just any contract will do. The way an agreement is written — even the particular words that are used — can spell the difference between an enforceable and nonenforceable contract. When the terms of the agreement are not clear and comprehensive, a simple transaction may quickly escalate to business law litigation.
Drafting Solid Noncompete Agreements And Contracts
Protection against competition, and hence protection of existing lines of business and customer base, may also be achieved by covenants not to compete. The restrictions in these agreements may range from prohibition against post-termination solicitation of certain customers or co-employees to a broad-form, across-the-board bar against post-termination competition of all types.
Such agreements are often used by employers and can serve as a valuable tool in protecting goodwill, future business and client relationships.
Restrictions, Part I: Time And Geographic Reasonableness
Care must be taken, however, in drafting such noncompete contracts. First, in all or virtually all states, such agreements must be reasonable both as to time and geographic scope.
What is reasonable for one employer or industry may not be reasonable for another, however, and the business owner or management should seek legal advice on this issue. For instance, a large geographic territory for a noncompete between general practice dentists might not be reasonable since most patients of most dental practices come from a geographic area that is close to the practice. On the other hand, a broad geographic zone might be reasonable for a noncompete entered into to protect a software developer with a worldwide market.
Restrictions, Part II: Colorado’s Statutory Prohibition, C.R.S. §8-2-113(2)
In Colorado, a statute exists that prohibits many noncompetes and requires extra care in drafting to ensure enforceability. When drafting, enforcing and defending against noncompetes, our firm routinely takes this statute into account.
C.R.S. §8-2-113(2) provides that all restrictions on a person’s post-employment competitive activity are void unless they fit into one of three categories:
- A noncompete entered into as part of the sale of a business or the assets of a business
- A noncompete agreement to the extent it protects trade secrets
- A noncompete entered into between an employer, management or executive personnel and professional staff employees
Restrictions, Part III: Physicians, C.R.S. §8-2-113(3)
A special rule exists under the Colorado statute for noncompete agreements between physicians. Provisions that prevent physicians from practicing in any specific location are void in Colorado. Instead, physicians can agree to certain damages provisions in the event a physician leaves a practice to engage in a competing practice.
However, there are specific restrictions on how such damages can be calculated. It is absolutely critical that competent legal counsel be retained prior to drafting covenants not to compete involving physicians. Watrous | Goodwin | Reha has a wealth of experience designing, enforcing and defending contracts not to compete between physicians, and we have successfully represented doctors numerous times regarding these special covenants.
Call 720-594-7400 To Schedule An Appointment With Us
The state laws governing business contracts, protecting intangible assets and other information, are nuanced. Watrous | Goodwin | Reha stands ready to provide its clients with highly knowledgeable representation regarding this vital component of today’s business environment. To schedule a consultation with our innovative attorneys, call our firm at 720-594-7400. You may also reach our office in Littleton by completing our online form.