An increasing number of companies are asking both new employees and existing employees to sign non-compete agreements. These are generally contracts in which an employee is asked to legally commit to not go to another employer or job in which they will compete with the employer, but that is not always the case. In recent years, there has been growing concern that non-compete agreements are being written in a way that limits the employee in an unreasonable way, preventing them from seeking work in the same industry or job capacity for too long a period or too broad a geographic territory.
If you have been asked to sign a non-compete agreement it is important that you read it closely to make sure that you understand what it contains before signing it. Though it may feel uncomfortable to ask for time to review the contract, it is illegal for an employer to refuse that request — and you may be able to negotiate the non-compete agreement’s terms.
If you’ve already signed a non-compete and now feel trapped by its language, there are a few things you should keep in mind:
- Though many people will tell you that a non-compete agreement is unenforceable, that is not necessarily true. They are real contracts, and if their language is considered reasonable by a court then you will need to adhere to its terms. If, by contrast, its terms are restrictive to the point where they seem to prevent an employee from getting a new job, it is less likely to be upheld.
- Non-compete agreements are not written for your benefit as the employee. They are designed to protect either your employer’s investment in your training or their trade secrets and competitive edge. If the terms go beyond what is reasonable in that goal, a court will take a dim view of the agreement.
- Most non-compete agreements are written to prohibit competition within a geographical limit, for a length of time, or by the services that you are able to provide to a competitor. The larger the geographic restriction, the longer the period of time and the more restrictive the industries and service you can provide, the more likely a court is to view the terms as an unlawful restraint on your ability to work and earn a living.
Courts hearing arguments regarding non-compete agreements will also consider who the employee is and their level of sophistication and ability to understand what they have signed. If you are approaching a new job and have been asked to sign a non-compete or are trying to leave a job for another, we can help. Contact our office today to set up a time for a consultation.