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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Non-Compete Agreements

Most employers forbid employees from competing with the company while they are on the job. But some employers also require employees to agree not to start their own businesses or go to work for a competitor after they leave their jobs with the company. These employers require their employees to sign agreements that say something like “I promise not to compete with the company after I quit or get fired” for a specified period of time. These contracts are called “Covenants Not To Compete” or “Non-Compete Agreements.

Are non-compete agreements legal? It depends on the state you are in and what the agreement says.
In some states, non-compete agreements are invalid – because those states do not want to prevent their citizens from working for anyone they choose or from opening their own businesses.
Other states allow these agreements, because those states agree with employers who want to protect their businesses from competition from former employees. But even in these states, if the non-compete agreement stops the employee from competing at all, it will probably not be enforceable, because it is unreasonable. For example, if a salesperson has an agreement that says she can never compete with her former employer in any location in the United States, it might be invalid. On the other hand, if the non-compete agreement says that the worker cannot complete with her former employer in the same neighborhood for six months after the job ends, then that would more likely be valid. The bottom line: the less the contract restricts the employee, the more likely it is to be legal.
If you are not sure whether the non-compete agreement you want your employees to sign is valid, you should check with a lawyer who specializes in employment law.
Breaching a non-compete agreement If your employee has signed a non-compete agreement and did not want to comply with it, you should contact an attorney who specializes in employment law to find out if the contract is valid in your state.
If the employee (or the “former” employee) violates a valid agreement, you can probably sue the employee and recover the money that you lost because the employee breached the contract not to compete. You might also be able to stop the employee from operating a new business or going to work for a competitor. If your ex-employee has violated the non-compete agreement, you should contact a lawyer immediately

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