Dear Ananda,

Though having not been exposed to 'non-compete' agreements in the software companies I have been associated with, but would like to share this write-up on the same since you are on the pre-implementation stage of the 'non-compete' agreement..

GUARDING VITAL TRADE SECRETS

It's not easy, but there are sound ways to insure your competitiveness

Companies are likely to hold more trade secrets than executives realize. The conventional way to protect technical secrets is, of course, patenting. But patents only last 20 years; patenting is time-consuming and expensive; and once patents are made public, clever competitors may be able to figure out ways to get around them, especially with the aid of "reverse engineering" (figuring out how something is made by carefully taking it apart). However, in today's fast-paced world, 20 years is not insignificant. And, patenting has gained added appeal now that proprietary business procedures can be patented.

Most companies try to protect trade secrets by requiring employees who become aware of the secrets to sign non-compete agreements. According to Steven Cooper, a partner in the NYC office of law firm Anderson Kill & Olick, these agreements suffer from several deficiencies.

Longevity is the main weakness. Former employees can't be enjoined forever from working for a competitor--or setting up a competing company. A well-known example is Ross Perot, who set up a competitor to Electronic Data Systems, the service organization he sold to General Motors for billions.

For the full article, refer http://www.sristi.org/material/mdpipr2003/MDPIPR2003CD/M16%20guarding%20vital.htm

I am sure this link shall be of significant use to you..

Regards,

CHRM

"Think HR, think CHRM..