Should You Sign a Non-Compete Agreement?

It is your first day on the job. Excitement and optimism are prevailing as you sit at your new desk, viewing the employee handbook. Why would you ever think about the day you would leave? But within that stack of papers to sign on your desk, you may notice a non-compete agreement. This document would restrict your ability to work if you would ever decide to leave your present job. If you find yourself facing a non-compete agreement, here are some key things you should know.


What is a Non-Compete Agreement?

A non-compete agreement is a legally binding contract between an employer and an employee. In this arrangement, the employee agrees not to compete with the employer when the working relationship ends. Depending on the agreement, different types of competition are forbidden. Some examples include starting a business in the same type of work, or not working for competitors for a certain period of time, or for competitors within a certain geographic area.


A non-compete agreement is sometimes referred to as: non-compete clause, non-compete covenant, or a covenant not to compete. Contracts such as these are common, and they limit an employee’s ability to find work after leaving the present job. Non-compete agreements can be signed at the start of a job, or possibly after a raise or promotion. It is common for someone to be required to sign a non-compete agreement before collecting their severance pay after termination.


Why Employers Use Non-Compete Agreements

Noncompete agreements are enforced when the employer/employee relationship ends, and the employer wants to prevent the employee from competing with them in the same market. Independent contractors and consultants who end their relationship with a company are often required to sign these agreements to avoid competition.

Employers also use non-compete agreements to protect themselves against employees revealing company secrets or sensitive information about any elements of the business, including a company’s intellectual property, pricing, strategy, business or sales methods, ideas, marketing plans, operations, clients and customers.


Elements of a Non-Compete Agreement

Typically non-compete agreements include specific information, including:

● A date when the agreement begins

● The reason for initiating the agreement

● Specific dates during which the employee will be prevented from working in a competitive sense

● The location covered by the agreement

● Details about how the non-competing party will be compensated for agreeing to the terms.


Should You Sign a Non-Compete Agreement?

If you have a concern about signing a non-compete agreement, it may be wise to seek the counsel of an experienced attorney. In some cases, if a person refuses to sign a non-compete agreement, he or she may be denied the job. Is this legal? It depends upon each individual case, and the answer will vary depending on your specific circumstances.


What Happens When You Leave?

If you have signed a non-compete agreement, and you choose to leave, an employer may do nothing at all with respect to the non-compete agreement. Sometimes, it is even possible to ask your employer to be released from such an agreement at the time of your exit from the company. An employer can also choose to enforce the agreement and request a court order to prevent you from violating your non-compete agreement. Once an employer requests this injunction, you may face a hearing, which in cases like these, are usually expedited in order to prevent someone from violating their agreement and harming the former employer. If you find yourself in this circumstance, contact an attorney immediately, so he or she can provide you the advocacy and representation you need to ensure your legal rights are protected.


Contact a Business Attorney Today

If you have more questions about non-compete agreements or other business contracts, consider visiting with an experienced business attorney. An experienced attorney can answer any questions that arise in your specific situation.

14 views0 comments