FindLaw KnowledgeBasePublished: 2013-02-05
A non-compete agreement is often drafted by organizations in an effort to protect their business interests. Non-compete agreements prohibit employees from starting a competing business, or working for a competitor, within a certain period of time after their employment has ended. But in order to be valid, the agreement must also be fair.
Timing is everything
An employer cannot keep a former employee from pursuing other work in their chosen career indefinitely. If the court rules that the time constraints of the non-compete agreement cause an undue hardship on the former employee, it will not be enforceable. This is especially true if the employee was fired from the organization.
Location plays a role, too
A non-compete agreement will generally state that a former employee cannot work at a similar company, or start a similar business, within a certain distance of that company. But, just like with time constraints, the distance that the agreement covers must be fair. For example, a five-mile radius might be considered reasonable, while a 100-mile radius might be found to place an undue burden on the ex-employee.
Different states, different rules
In August 2012, the Missouri Supreme Court made its second ruling on a non-compete agreements in 25 years. In this particular case, the court enforced a non-compete agreement, which was designed to prevent an employee from working at a competing business within a 50 mile radius for two years after leaving the company. Although the court ruled that this particular agreement was fair, it also stated that the language of a non-compete agreement is key to whether or not it should be enforced. Another consideration is whether disclosing trade secrets is a part of the case.
Negotiating non-compete agreements
To protect your rights and make sure that a non-compete agreement is fair and equitable you will need to negotiate with your employer about the specific terms. During the negotiation, try to be as clear and detailed as possible about what is expected of you and of your employer, so that you know exactly what you are agreeing to.
In some cases, it may be in your best interests — and may also be an acceptable alternative to an employer — to request a non-solicitation agreement instead of signing a non-compete. Under a non-solicitation agreement, you are restricted from poaching your ex-employer’s customers after you leave the organization. This can protect the company, while still allowing you to work in the same field.
If you need help with negotiating a non-compete or non-solicitation agreement with your employer — or any other legal matter related to your employment — contact an experienced attorney. In order to get what you deserve in a contract, it is always best to get guidance from a legal professional who has intimate knowledge of these matters.