Non-Compete and Confidentiality Agreements Can Help Address the Problem of Employees’ Side Work

RCS Influencer Trent Cotney says contractors should clearly define their policies on side work and back it up with signed agreements.

Many employees in the roofing industry moonlight or perform side jobs after work or on the weekend. There are a lot of differing opinions on whether side work is acceptable or not. In some cases, if the side work is not taking business away from the company and the company’s resources and tools are not being used, a contractor might decide it’s all right for employees to do side work. In other situations, the side jobs may be competing with the business, cause the employee to perform poorly on their day job, or result in the employee habitually leaving early to get to their side job.

Whatever your stance on the situation, contractors should have solid policies in place on the issue in their employee handbooks and should consider asking all employees to sign a non-compete and confidentiality agreement. Confidentiality agreements, also known as non-disclosure agreements, protect private, proprietary information and trade secrets and should explicitly define what is to be kept confidential. For example, a contractor may have a proprietary installation method or sales methodology that should not be shared or used outside of the business in any way, otherwise competitors may be able to obtain and use the method to their own advantage. It is also important to include available remedies in the event that the agreement is breached, and should specify the contractor’s ability to obtain an injunction in addition to monetary damages.

Having employees sign a non-compete clause protects your business from the competition that can result from employees performing side work. It also provides protection for a specified period of time after an employee leaves the company from the employee either starting his or her own competing business or obtaining employment with a competitor. Acceptable time periods range from one to several years, depending on the level of responsibility the employee holds within the company.

Laws vary by state as to the enforceability of a non-compete agreement, including acceptable geographical and temporal limitations, so be sure to familiarize yourself with the laws in the state where your business is headquartered.

Trent Cotney is the founder of Trent Cotney, P.A. Construction Law Group, specializing in construction law. See Trent’s full bio here.

Author’s note:  The information contained in this article is for general educational information only.  This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.