What Potential Employees Should Know About Non-Compete Agreements
A non-compete agreement stipulates that if an employee leaves their job, they cannot work for their former employer’s competition during a specified non-compete period. These agreements, which are signed upon employment, are meant to protect the interests of the employer and prevent former employees from sharing vital trade secrets and insider information.
If you are considering a job where you are required to sign a non-compete agreement, you should take careful steps to understand all of its stipulations before you sign. Understanding the agreement upfront can save you headaches later. Here are three questions to consider:
1) Is the agreement reasonable in what it asks of you? How long is the non-compete period the employer is asking you to agree to? Will you be okay not working for that length of time if you can’t find work because of the agreement? Is the agreement specific in the types of jobs that you will be unable to take, or is it general and vague? If an agreement specifies merely that you can’t do any job similar to yours with a competitor, it may overly limit your employment options. While the job probably sounds good right now, situations change and you may be looking for employment later on. Make sure that the non-compete agreement doesn’t restrict too tightly your future employment opportunities.
2) Does the agreement offer a garden-leave provision? A garden-leave provision requires your former employer to pay your salary and benefits if, because of the agreement, you are unable to find employment during the non-compete period. Non-compete agreements protect employers, but garden-leave provisions protect you. If the agreement doesn’t have one, ask if it can be added in or contact an attorney who specializes in contractual law to help you determine your options.
3) Does the non-compete agreement adhere to public policy? Each state has specific statues that govern non-compete agreements. If a non-compete agreement seems off to you, you may want to hire an attorney who specializes in contractual law to review it for you. The agreement may not actually be legally binding. In that case, you can sign the agreement knowing that it couldn’t actually be legally upheld, you could ask the employer to revise the agreement, or you could take the faulty agreement as a signal that your potential employer may not be the best one to work for. Your attorney might be able to help you decide.
In conclusion, a well-written and fair non-compete agreement takes care of both the employer and the employee. Poorly written agreements, however, tend to take advantage of the employee, limiting their future ability to gain employment in their field. If you find yourself suffering unjustly from a non-compete agreement, you should contact an employment law attorney. If they deem the agreement to be unreasonable or in violation of public policy, they can help you file declaratory judgment against your former employer that could void the agreement and allow you to begin tort proceedings to recover damages. Preventing such legal action, though, by making sure your agreement is reasonable upfront can save you uncertainty and suffering later.
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