Most businesses don’t set out to ignore their agreements and policies. More often, those documents are drafted at a specific moment in time, when the company was smaller, operating in fewer states, or dealing with a different set of risks, and then quietly put to work for years without much follow-up. But laws change, business models evolve, and workforces look very different today than they did even five years ago, all of which can impact the efficacy of those agreements and policies.

An agreement or policy that once made sense can become outdated or unenforceable without anyone realizing it. Unfortunately, many companies don’t discover those gaps until something goes wrong: an employee leaves, a dispute arises, or a competitor gains access to sensitive information. By then, the business’s options may be limited. A proactive audit helps identify and address these issues before they turn into costly problems.

Why agreement and policy audits matter

Employment agreements, restrictive covenants, handbooks, and internal policies all serve the same basic purpose: setting expectations and protecting the business. But those protections are only effective if the documents comply with current law and reflect how the business actually operates.

This is particularly important for companies operating in multiple states. Missouri and Illinois, for example, approach restrictive covenants differently. Illinois imposes statutory requirements, including wage thresholds and stricter rules around consideration, while Missouri generally allows continued employment to serve as consideration and does not impose wage thresholds. So, a form agreement that works in one state may be questionable or unenforceable in another.

Even within a single jurisdiction, laws evolve. In fact, in 2025, nine states passed new or updated noncompete laws. What was reasonable or enforceable only one year ago may not meet today’s standards or statutory requirements. Regular audits help ensure the business does not rely upon documents that look protective on paper but fail when scrutinized.

How businesses typically realize there’s a problem

In practice, though, many audits begin reactively. An employee departs for a competitor, and the company seeks to enforce a non-compete, non-solicit, or confidentiality agreement, only to learn that the agreement, unsupported by proper consideration, not compliant with current laws, or otherwise unenforceable. That realization often comes at the worst possible time.

Alternatively, growth into new markets, new product lines, leadership transitions, shifts in how and where work gets done, like remote or hybrid arrangements, should lead to more proactive audits.  Additionally, when a business sees competitors more aggressively recruiting employees or customers, that should prompt decision-makers to consider whether their agreements and policies are still effective to protect the business.

The purpose of an audit is to avoid learning these lessons the hard way. Addressing gaps before there is a dispute provides far more flexibility and protection than trying to fix them during a dispute.

Agreements and policies that benefit most from review

• Employment agreements and restrictive covenants: Non-compete, non-solicitation, confidentiality, and intellectual property assignment provisions should be highly scrutinized documents in an audit. These agreements must be narrowly tailored to protect legitimate business interests and supported by appropriate consideration. Furthermore, if the business operates in multiple jurisdictions, the agreements must be tailored to comply with the state in which the employee works or lives – often meaning a business will need multiple versions of an agreement to ensure enforceability in each jurisdiction.
• Employee handbooks and internal policies: Handbooks frequently lag behind operational reality. Policies addressing technology use, remote work, disciplinary procedures, or confidentiality may no longer reflect what actually happens day to day. Courts and regulators often look closely at whether a company follows its own written policies.
• Vendor, contractor, and partnership agreements: Over time, businesses accumulate multiple versions of templates. Indemnity clauses, termination rights, confidentiality obligations, and data-handling provisions can become inconsistent or outdated as those templates evolve.

What courts and regulators focus on

When agreements are challenged, courts look for clarity, consistency, and fairness. Vague or outdated language can undermine enforceability. Specifically, restrictive covenants must be narrowly drafted and used only to protect legitimate business interests.

Consideration is a threshold issue. In Illinois, continued employment may not be sufficient. For long-tenured employees, businesses should ensure any older agreements are supported by adequate consideration and, if the business needs current employees to sign an updated agreement, they should ensure the employee is given a raise, bonus, or promotion that can serve as consideration for the new agreement.

Consistency also matters. Conflicts between policies, offer letters, handbooks, and individual agreements often create confusion and can weaken enforceability. Just as importantly, courts analyze whether the company applies its policies in practice. Written rules that are routinely ignored can become liabilities.

Signs it may be time for an audit

Certain events should prompt a closer look at the agreements and policies:

• Mergers, acquisitions, restructuring, or leadership changes
• Significant growth or expansion into new roles, technologies, product lines, or states
• Increased employee turnover or competitive pressure
• Legislative or regulatory changes that impact agreements and provisions
• Shifts in technology, remote work, or data-handling practices

Any of these developments can expose gaps in documents that were not designed for the current climate or the current version of the business.

What an effective audit typically includes

A thorough audit starts with identifying each agreement and policy in use, not just what might exist on a shared drive, but the agreements signed by employees and policies on which they rely. From there, counsel can assess whether those documents align with current law and company operations.

Audits often uncover agreements containing language that was once enforceable, but now is not, missing intellectual property provisions, inconsistent disciplinary policies, or outdated confidentiality terms. For restrictive covenants, it is necessary to ensure that employees received adequate consideration when they signed the agreement, which often is simply ensuring they signed the agreement as a condition of employment.  If there are employees who did not sign at the beginning of employment, there may not be adequate consideration, and then the audit must determine practical ways to address deficiencies.

Updating templates is only step 1 of the process. Next, businesses must plan how and when new agreements or policies will be rolled out, how any changes will be communicated, and how those versions will be tracked. Without a clear implementation plan, even well-drafted updates can create confusion.

Common risks of putting audits off

Relying on outdated agreements can leave a business exposed. One-size-fits-all templates may not account for differences in state and federal law or employee roles. Policies that drift from actual practices can create compliance and litigation risks. In many cases, these problems are avoidable, but only if identified and remedied before any dispute.

The strategic value of regular reviews

Regular agreement and policy audits are not only about risk avoidance. Updated, well-aligned documents strengthen enforcement, reduce compliance concerns, and give management and HR teams clearer guidance. They can also provide flexibility, so the business can adapt more easily to growth, restructuring, technological, or other changes.

Staying ahead

Many businesses benefit from scheduling annual or bi-annual reviews, training managers on updated documents, and maintaining a master list of agreements and versions. Planning ahead for how restrictive covenants will be reissued and when new consideration may be required will prevent mistakes that might negatively impact the ability to enforce those agreements.

Working with counsel familiar with the nuances of the states in which you operate will help ensure agreements reflect both current law and real-world business needs.

Conclusion

Agreement and policy audits are not a formality that is only reserved for times of crisis. Instead, they are a practical and important tool to continue protecting the business, maintaining enforceability, and staying aligned with an evolving workforce and regulatory landscape. Companies that review their documents regularly are far better positioned to address issues before disputes arise and to move forward with confidence when they do.

If your business has questions about the enforceability of its agreements or would benefit from an audit of its employment agreements or policies, contact your UBG attorney or Chris Pickett at cpickett@ubglaw.com.

The information provided in this article speaks only to the information and guidance we have available as of the date of publication and is subject to change. This legal update was created by UB Greensfelder LLP and is not intended as a substitute for professional legal advice. Receipt, by itself, does not create an attorney-client relationship. For any questions, or for further information, please contact your UB Greensfelder attorney.