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Non-Compete Agreements That May Be Invalid

Depending on the industry where you work and the nature of your job, you may be required to sign a non-compete agreement. Such agreements are a common part of many industries, so much so that you may sign one without truly scrutinizing its contents. However, just because you are presented with a non-compete or have even signed one, doesn’t mean that it will absolutely hold up in court. Often, an employee will agree to a non-compete agreement out of a desire to stick the landing on a job, but it may present unfair terms that unreasonably limit opportunities for additional employment.

For a non-compete agreement to be viable, it must generally meet three standards. First, it is necessary for the terms of the agreement to protect a legitimate business interest. If your non-compete agreement asked you to give up certain rights or privileges that are not relevant to the business that employs you, it may not hold up in court.

Second, a non-compete agreement must include some specific consideration for the person signing it. In simple terms, the party requesting the non-compete agreement must offer some specific additional value for signing the agreement. Since the employee is agreeing to not only work for the employer, but also to not work for another employer, presumably for a certain amount of time, that may greatly reduce access to livelihood. To counteract this sacrifice, the employer must offer additional value to the employee, and generally offer it at the time that the agreement is made.

Third, the agreement must be reasonable in the sacrifices it asks of the employee. This includes the scope of the industry it covers, how long the agreement extends subsequent to the employee leaving the employer, and how large a geographic area the agreement may cover. If your employer presents you with a non-compete that affects industries outside of its own, or if the terms are for longer than is reasonable (typically a few years), or if the geographical scope is unreasonably large, the agreement may be invalid.

No matter what your circumstances may be, you deserve experienced, qualified legal guidance. An attorney with years of dealing with complex contract issues can help you evaluate your situation and protect your rights before they can be infringed.

Source:¬†FindLaw, “Non-Competition Agreements: Overview,” accessed March 03, 2017