You were just offered a sparkling, six-figure salary from a top-100 business. The position is a posh one—benefits, 401ks, and stock options have been thrown at you from all directions, and it’s just a matter of choosing the best gems in the jewel box. But there’s a catch. Your saving grace, the business with the golden employment package, is in direct competition with your current employer.
Do you remember signing that non-compete clause?
If you look at most employment contracts, you’re very likely to run into a non-compete agreement or non-compete clause. These is a part of your contract that forbids you from working for your employer’s direct competitors for a specific period of time—usually several years. Take a look at your own contract and see if you are restricted from doing any of the following:
- Working for your employer’s direct competitors
- Working in a specific, competitive industry or business
- Working in a particular geographic area
If any of those “no’s” come up in your contract, you’ve probably signed a convenant not to compete.
Luckily, most non-compete clauses are nothing to worry about. The law requires all of those kinds of agreements to be reasonable, which means that an employer can’t monopolize your life by making too many restrictions. In fact, if the non-compete you signed is unreasonable, a court won’t enforce it at all.
What makes a non-compete clause unreasonable?
- Time: A restrictive period that lasts too long.
- Geography: A geographic restriction that is too large.
- Industry: Forbidding work for too broad a range of businesses.
- Interest: When there’s no legitimate interest in enforcing the non-compete.
So maybe you wouldn’t be able to take that glamorous job from your deep-pocketed competitor, but you aren’t going to be blacklisted from your industry either. But be wary, because there is an exception to your protection from unreasonable non-competes! If you accept and receive compensation in exchange for your agreement with a particular non-compete, the court is very likely to rule in favor of your employer.
Think a moment before you pick up your pen, and have an employment lawyer go over any employment contracts you plan to sign. Make your job work for you.
Need help understanding the details of your contract? Post a thread with the text in question on our Employment and Labor Law Forum, and you should receive a helpful answer.
by Kate Beall
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