A non-compete agreement is a legally binding contract typically executed as a condition of employment. The term of such a contract usually extends for a period of time after the employee has left his/her employment. During the length of the contract, it restricts the employee from finding similar or alternate employment in the same geographic area or market as the current employer.
Generally, a prospective employee would be asked to sign a non-compete agreement because the employer is planning on spending a considerable amount of money to train the employee or because the employee will become privy to company "trade secrets." An example of such a trade secret would be a database of clients that, if an employee with this knowledge were to find a new job in the same field and same geographic area, would ensure a great start to the position.
If an individual has signed a non-compete agreement and now wants to break it, there are circumstances in which the contract may be rendered unenforceable by an arbitrator or a judge.
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Whether a non-compete agreement is enforceable or not is a matter of contract law, which varies from state to state. Generally, state courts are reluctant to enforce non-compete agreements unless they are narrowly written. You must determine the validity of the contract by sourcing a lawyer or performing your own research to see if your employer has drafted the contract too broadly. Examples of contract language that could render an agreement unenforceable are requiring an unreasonable length of time to pass before an employee can work for a direct competitor, or requiring an employee not work in a geographic area that is unreasonably large.
Technically, all contracts are negotiable. You may be able to negotiate the terms of the non-compete agreement. You may even be able to negotiate your way out of the agreement on your own either before, during or after your employment.
Consult with an attorney to review the agreement, as it may be necessary to ask a court to review the validity of the contract.
Do not ignore the non-compete agreement you have signed. If you take another job that is in violation of your agreement without negotiating with the employer or consulting an attorney, you could risk having a lawsuit filed against you. A judge could find you in breach of your contract and you may have to pay fines or other court-related costs.
Things you need
- Non-compete agreement