If you’ve spent any time in the workforce, you know how intimidating it can be to be asked to sign a non-compete agreement. Many employees dread just the idea of being asked to sign one because they create so many “fuzzy” areas. Not to mention the fear of not being allowed to find another job in your industry, should you need to leave the one you currently hold, is downright frightening.
What do you need to know about non-compete agreements and should you ever consider signing one?
It’s understandable why employers would be concerned about their greatest talent leaving and working for a competitor. Not only are they losing a valuable asset, they also risk that former employee intentionally or unintentionally sharing secrets of the trade with a competitor.
Despite these valid concerns, employers usually don’t get very far when it comes to defending their non-compete agreements, and they face legal action not only by the employee in question, but also the resources of the company to which he or she defected. Employers use non-compete agreements as a deterrent, but unless they know their agreement is airtight, they rarely follow through on defending it.
Non-Compete Agreements Need to Be Specific and Limited
Non-compete agreements are legal, but unless designed in a very specific way, tend to not hold up in court. Your employer has the right to restrict you from working for a competitor for a specific period of time after you leave your current position and they can prevent you from sharing information with your new employer by asking you to sign a confidentiality agreement.
However, the language in a non-compete agreement must be very specific and courts tend to frown upon generic language. A specific agreement detailing actions that could cause harm to a company that does not prevent a former employee from earning a living tends to be enforced.
It’s also important to consider your position within a company. If you are asked to sign a non-compete agreement as a lower level employee and it will prevent you from moving forward in your industry, your employer might be making an unreasonable demand. Non-compete agreements are usually only appropriate for higher level executives and key employees who have access to confidential and proprietary information.
To read what Forbes.com had to say about non-compete agreements, check out this article from Forbes.com.
Non-Compete Agreements Cannot Be Used as Punishment
You also want to be wary of a former employer using a non-compete to hurt you or their competition after the fact. If your position did not expose you to confidential information, you left on good terms, and you were offered a higher paying or higher level position with a new company, only to receive notice of breaking a non-compete clause from your former employer, chances are you are the victim of industry politics. Still, it’s important to review any non-compete agreement carefully if you are asked to sign and if you have concerns, speak to an attorney before signing it.
If you would like a review of a non-compete or confidentiality agreement or you believe you are being unfairly targeted by a former employer, we can help. Contact Borrelli & Associates, P.L.L.C. for more information or to schedule a consultation with an employment lawyer in New York.