Enter Brian Cuban, working for Mark Cuban has provided him with years of experience in formulating contracts to protect the interests of numerous startups. I reached out to Brian and he was kind enough to lend us his time to clarify the answers to these often fuzzy questions.

If you’d like to learn more about Brian, you can check out Brian’s blog or follow him on twitter.

1. Are non-competes “un-american” in your eyes?

When drafted properly and used in appropriate circumstances, non-compete agreements are a proper and valuable tool for employers to protect their interests after making substantial financial investments in their employees with regards to training and knowledge in their industry. Employees rarely stay at one company for their entire career. Employers want protection from “training the competition”

2. Why SHOULDN’T/WOULDN’T a person sign a non-compete?

There is no simple answer. It depends on the particular facts of the situation and the law of the jurisdiction covering the agreement. It is important to know all the facts and ask the right questions before you sign. Things you should ask yourself:

What is the scope of the non-compete agreement?

How does the agreement define “sensitive” or “confidential” information?

Does the contract specify a time frame within which you cannot work for a competing company?

These are just a few of the issues to consider. You should consult an experienced employment attorney before signing anything that would restrict your legal rights in obtaining employment.

3. It is often heard that Non-Compete’s are unenforceable, does this statement have any basis?

The legal issues around non-competition agreements depend on the laws of your state and the noncompete agreement itself. Some states take a dim of view of these agreements because they limit an employee’s ability to earn a living. In states that recognize non-competition agreements, such as Texas and New York, courts often impose time and geographic restrictions on them.

4. What are the limitations on non-compete’s?

A non-compete that constitutes a complete restraint of trade will in general not be enforceable.

5. Is there a maximum length of enforceability on non-compete’s?

This again depends on the facts and circumstances of your situation. In Texas courts generally do not like to go beyond 2 years. You should consult an experienced employment attorney in your jurisdiction to protect yourself before signing any non-compete.

Disclaimer: This is not legal advice. This is a general guide to the navigate the paperwork that typically comes when you work for a startup. For legal advice, find a lawyer in your jurisdiction who properly understands its governance.

This was the 2nd of a 3 part series on paperwork that is typically signed when joining a startup. The previous Q&A with Brian Cuban that covers NDA’s is here. Look forward to reading the second piece, “Equity - What is reasonable?” soon.