Labor and Employment

How Restrictive Can Non-Compete Agreements Be?

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Employee Agreement

Signing a non-compete agreement with a new employer means that you can't compete with your employer's business for a certain amount of time after terminating your employment. These agreements may restrict who you can work for, the industry you can work in, and the location of your future jobs. All of this can make it very difficult to find a new job. However, non-compete agreements aren't always received well by courts, which means you may not actually have to comply.

Your Employer Must Give You Something of Value

A non-compete agreement is a contract. Therefore, your employer must give you something of value in exchange for your promise not to work for a competitor. Some states consider the offer of employment itself to have sufficient value, if signing the non-compete agreement is required as a condition of the job offer. Many other states will require something more, such as an additional payment of money. If you sign the agreement while you're already working, however, many courts don't view your continued employment as having the same kind of value.

A Non-Compete Agreement Cannot Last Too Long

Your non-compete agreement cannot be valid for the rest of your career. It must be effective for a reasonable amount of time and it must include a date when you're free to go work for a competitor. The amount of time considered "reasonable" depends on the state. Generally, non-compete agreements that last longer than two or three years can't be enforced by a former employer.

Too-Broad Geographic Restrictions Can Void the Agreement

The main purpose of a non-compete agreement is to prevent you from competing with your employer. Therefore, geographic restrictions in the agreement must prevent you from working only in areas where your employer conducts business. Many states give you more protection than this. In these states, the agreement prevents you from working only in regions where you actually performed work for the employer. In these states, the agreement may prevent you from working in one county, but not in a neighboring county.

Courts Won't Allow Forced Unemployment

Regardless of the terms of your non-compete agreement, courts don't want you to be forced out of employment or out of your profession. If a non-compete agreement prevents you from using professional skills that you've developed over many years, courts will find this restriction overly broad and probably not enforce the non-compete agreement.

An Employment Lawyer Can Help

The law surrounding non-compete agreements is complicated. Plus, the facts of each case are unique. This article provides a brief, general introduction to the topic. For more detailed, specific information, please contact an employment lawyer.

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This article was verified by:
Mr. Merritt J. Green | June 26, 2015
6849 Old Dominion Drive, Suite 220
(703) 556-6505 View Profile
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