A non-compete agreement, sometimes referred to as a restrictive covenant, is a special type of employment contract that specifies restrictions on the type of work an employee may perform following the conclusion of employment. Specifically, non-compete agreements usually place limitations on where, how, and for whom an employee may work once the current employment relationship comes to an end.
There are several reasons you may be asked to sign a non-compete agreement. Many employers use non-compete agreements to protect themselves against certain types of economic or public relations damage. In most cases, a non-compete agreement prevents a worker from stealing the company’s clients and then leaving to work for another company or open an independent business, or from otherwise engaging in unfair competition against the current employer. Employers sometimes also use non-compete agreements to prevent workers from disclosing trade secrets to competitors.
In some situations, non-compete agreements may place unfair restrictions on workers’ future job prospects. The law sometimes protects employees from unfair non-compete agreements by holding them unenforceable. Courts may determine that a non-compete agreement is not enforceable if it places an undue hardship on the employee, does not serve the legitimate interests of the employer, or is against the public interest. When a non-compete agreement is found to be unenforceable, it is most often due to unfair limitations, such as extending over a wide geographic region or lasting an unreasonable amount of time.
If you have been asked to sign or think that you may be subject to the restrictions of a non-compete agreement, an experienced employment attorney can help. Before signing a non-compete agreement, it is important that you understand your rights and exactly how the agreement may affect your future employment options. If you have already consented to the terms of a non-compete agreement that is unfair, it may not be enforceable. Even if the agreement is enforceable, however, you may be able to negotiate its terms to protect your rights. In all of these situations, appropriate legal representation can help you quickly and effectively reach a positive resolution.