non-compete related to specific training?

hr traci

We are putting 5 employees through intensive skills training in a new product area of our business. It will last 5 days and cost at least $2000 per employee (conducted by outside source, on our premises).

The GM has asked if we can have these employees sign an agreement that they will not leave us for a competitor within one year of training, because of the expense and potential benefit to the competing company.

My questions -
1. Is this legal? - we do have a non-disclosure agreement which includes production techniques, which everyone signs at hire.

2. Would you agree that this moves the training from a morale-builder instead into a negative, non-trusting tone?

As an aside: The employees that will be in training all have at least 10 yrs of service, and the new skills will be added on to their current responsibilities. Our voluntary turnover is extremely low.

Thanks for any input!

Parabeagle

Given the track records of the employees involved and your turnover, I would consider the agreement to be unnecessary. As you mentioned, you already have a nondisclosure agreement that specifically addresses production techniques and, based on your information, I would think that would be sufficient to protect your interests. Assuming you are an employment-at-will employer, you could also jeopardize that status as far as these employees are concerned by binding them to you for a year, making it difficult to terminate them if the necessity arose.

Shadowfax

The answer to the first question is 'yes' you can. Non competes in Mi are scrutinized closely by the courts, but so long as it is for a reasonable period of time, in a reasonably defined area, then non competes are valid and effective. Whether it is a good business decision or not, I leave to your judgement.