It's becoming more and more common for employers to require workers to sign non-compete agreements. These documents prevent an employee from leaving the company and then working for a business that competes with their former employer for a fixed period of time.
With more agreements come more lawsuits. They've risen more than 60 percent of the past decade, according to The Wall Street Journal.
If you have questions about your non-compete agreement – or if your former employer is suing or threatening to sue you – it's important to contact an attorney, such as Alterman Stuart J, who can explain your rights.
In general, here's some of what you need to know:
Laws vary by state
Non-compete agreements are severely restricted in some states and are banned in three of them. In some states, judges can strike parts of the agreement without necessarily voiding the whole document. In other states, if part of the document is legally flawed, the judge must throw out the entire document.
These varying rules also make a difference if you sign a non-compete agreement in one state but move to another for new employment. If you've moved from a state that allows such agreements to one that generally does not, the rules of the new state will usually apply.
In general, courts favor agreements that were presented before you started the job over ones that were given to you after you were already employed.
They also have ruled that if you change jobs within the same company, your employer may need to get you to sign a new non-compete agreement. Otherwise, the original agreement may not be valid.
Employers can overreach
Some companies are overreaching and requiring every employee to sign a non-compete agreement. The list of employees required to sign agreements in various states includes maids, nail stylists, and agricultural workers.
While some employees may have access to trade secrets and intimate knowledge of an employer's business practices and interests, others probably don't. If you didn't have access to such information but were required to sign a contract, the court may find against your employer. The court may decide that the agreements were unnecessary to protect business-related information and unfairly restricted workers' ability to leave the company and find a new job.
Time and scope must be reasonable
Non-compete agreements must be reasonable in terms of time and scope. What this means is up to individual courts ruling on individual cases. A judge may rule that your agreement covered a period of time that was unreasonable. He or she may also decide that the geographic area was too broadly drawn. For example, perhaps your agreement prohibits you from working for a similar employer within 250 miles. The judge may rule that only businesses in close proximity should be covered under the agreement.
If you've signed a non-compete agreement, contact a lawyer with experience in employment and labor law to learn about your rights. He or she can help you determine if the agreement will hold up in court and represent you if your former employer threatens legal action.