The trouble with most noncompete agreements is that they haven't a prayer of holding up in court. They're usually too vague and too restrictive, aiming to provide far more protection than most companies actually need -- and far more than most judges will permit. So says Harvey Mackay, chairman and CEO of Mackay Envelope Corp., in Minneapolis.
Mackay's standard agreement has been a success for 25 years -- solid in the courtroom and, more important, both effective and fair outside it. Former employees may go to work for another envelope company immediately -- with only two restrictions, both of which hold for two years.
Mackay restricts former employees from selling envelopes in only a small area, such as the cities where most of their old accounts were.
Then there's what may be the contract's strongest component: the client list, rendered off-limits after a salesperson leaves Mackay Envelope. "These are valuable accounts," Mackay says. "We want to make it clear that they're Mackay Envelope's property."