Generally, a covenant not to compete is when an Arkansas employee agrees not to work for an employer's competitors when the employee leaves the company. Covenants not to compete are also known as "non-compete clauses". An employee who signs a covenant not to compete can receive compensation for the agreement, or in some cases the agreement is a condition for their being hired.
When are Covenants not to Compete Unenforceable?
Knowing in advance whether a judge will enforce an employee's non-compete clause can be difficult. Even if the employee's interests may be significant Arkansas courts will certainly assign great weight to a person's freedom to choose the type of employment that is suitable for them. Accordingly, only those covenants which are deemed to be reasonable will be upheld by the court. Those agreements that courts have seen to be unreasonable include those that last for an prolonged period of time or cover geographic areas around Fayetteville that are unreasonably large.
Limitations on non-compete clauses must also be restricted to cover only competitors who are related in a reasonable way to the employer's industry. Lastly, an employer is required to have a legitimate business reason in its motivation for imposing a covenant not to compete on an employee.
Do I Need an Attorney when Dealing with a Covenant not to Compete?
A Fayetteville, Arkansas lawyer can help you review the covenant before you sign any documents that might limit your rights. The lawyer can help you in negotiating modifications or if needed, they can possibly draft a new agreement which will be acceptable to both parties. An attorney can also give valuable advice when it comes to suing employees for breaching covenants, or counseling employees who have signed one regarding whether they can accept a different job.