Non-Compete Agreements

Employees are often presented with non-competition agreements upon entering employment, during employment or after their employment as part of a severance agreement.  Courts may enforce these agreements and so it is important to understand the impact the agreement may have on an employee's ability to earn a living. Employees asked to sign a non-compete should have an experienced employment attorney review their agreement. 

Non-competition agreements are defined by three essential terms: length of time, type of job, and geographic scope.  Courts recognize that non-competes can prevent people from earning an income and will narrow or void non-compete agreements that unnecessarily prevent people from making an income.  For instance, non-competition agreements are found invalid if they were entered into after employment began and the employer did not provide additional compensation.  In narrowing a non-compete, the Court considers whether or not the restraint is necessary for the protection of the business or good will of the employer, and if so, whether the stipulation has imposed upon the employee any greater restraint than is reasonably necessary to protect the employer's business.  Factors that impact this include the nature and character of the employment, the time for which the restriction is imposed, and the territorial extent of the locality to which the prohibition extends.

This means that Courts will consider all the facts and circumstances to ensure that the non-compete is for the shortest period of time, narrowest range of jobs, and smallest geographic area to protect the interests of the employer.  Courts could narrow a nation-wide non-compete restriction to a metro area restriction, or narrow a restriction against working at a medical device company to a restriction against working on a particular type of medical device.  Perhaps most common, a two-year period could be cut down to shorter time period.

In some fields, especially for executives and sales employees, non-competition agreements can prohibit employment for a significant period of time.  In these situations, it is critically important that the executive is compensated for the interruption to their career at the time of negotiating the executive agreement.  Further, upon entering the non-competition period, a Baillon Thome Jozwiak & Wanta LLP employment attorney can work with the company’s legal team to identify work that is not subject to the non-competition agreement.

Our experienced employment lawyers have assisted employees in understanding, negotiating, and challenging their non-competition agreement.  It is important to consult with an attorney if you have been offered a non-compete, if your employment options are restricted by a non-compete agreement, or if you are being sued by a former employer under the non-compete.  With our assistance, our clients can be assured that they are treated fairly.  When you contact us, you will always speak directly with an employment lawyer.