Employees are increasingly being asked to sign legal documents known as non-compete agreements, with some surveys showing that roughly 20% of employees are currently bound by these restrictive contracts. Unfortunately, many people feel that they have no choice on whether to sign on the dotted line. They fear they will not be hired, or that they won’t get a promotion or salary increase if they don’t comply with their employer’s request to sign. Worse still, if you want a new job but signed a non-compete in the past, you may worry whether you can even apply for or accept a position with a new company.
Whether you’ve signed or been asked to sign a non-compete agreement and you’re not sure how it affects you, the best thing you can do is to seek guidance from an employment attorney before complying. In the meantime, here are some basics you need to know about non-compete agreements.
Non-compete agreements are real contracts. In most cases, they represent a promise not to take a job in a similar profession or industry with a different employer, but every non-compete is different, and have varying degrees of restrictions on where and when an employee can seek employment, as well as for how long the restriction applies.
Though the purported goal of a non-compete agreement is the protection of the employer’s investment in the employee, as well as of their own business interests, there has been a rise in the use of non-compete agreements that have been viewed as overly aggressive in their language, with some essentially keeping employees from being able to work anywhere else. State legislators have outlawed many of these contracts, and the courts have taken a dim view of them as well: many of them have been deemed unenforceable. The overall consensus is that the more unreasonable the terms of a non-compete agreement are, the less likely it is to be upheld by a court.
Non-compete agreements generally impose restrictions on the geographic area in which an employee can work in the same industry, as well as how soon after leaving the employer the employee can seek a job in the same industry. Many also impose a limit on the type of position that an employee can serve in. The more broadly each of these restrictions is applied, the less reasonable a court is likely to think it is, and the less likely they are to uphold it.
If you need assistance with interpreting the language of a non-compete agreement, or in understanding your rights, our attorneys can help. Contact us today to set up an appointment to discuss your situation.