A non-compete agreement is a contractual clause that attempts to prevent you from working in competition with your former employer for a defined period of time.
A non-compete agreement must be part of an employment agreement or other contractual document in writing. These clauses are almost never ‘implied’, unless you are a very senior executive or someone with very special knowledge of your employer’s business, referred to as a fiduciary employee.
Are these clauses enforceable?
You may have heard that courts don’t like to enforce non-compete agreements. For the most part this is true. If a clause is unreasonable, in any variety of ways, it can be invalid and void.
However, keep in mind that if an employer properly drafts the clause in question and that clause does not overreach in terms of its length and scope, it may very well hold up in court.
How can you tell if a non-compete or non-solicit will be upheld?
The three main challenges to a non-compete clause are that it applies for too long, its geographic scope is too broad and the clause is unnecessary to protect the employer’s interests (i.e. it is unfair). However, there is a fourth challenge. In certain cases, the entire contract may not be enforceable because, for example, it was signed under duress or without proper consideration.
What happens if you violate a non-competition clause?
You could be sued for damages for the value of lost business or lost clients that your former employer would not have otherwise lost. These damages can be nominal but they can be significant as well. In remote cases, a court could also award your former employer an “injunction”, which is essentially a restraining order that prevents you from working in the field or continuing to work on a project.
How can Whitten & Lublin Employment & Labour Lawyers help?
The question of whether your non-compete agreement will apply to you is not something you should leave to chance, try to sort out on your own or defer to the advice of a generalist or novice lawyer. The proper interpretation of a non-compete agreement is something that comes from years of experience in drafting, fighting and overturning these clauses. Whitten & Lublin’s team of experienced employment lawyers know when a non-compete clause will stand up in court and when it will not. If you have signed a non-compete agreement and need advice from an expert, call Whitten & Lublin for a legal consultation.