Generally, a covenant not to compete is when a Hawaii 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". Signing such an agreement can either be a condition for being employed, or the employee may receive additional compensation for doing so.
When are Covenants not to Compete Unenforceable?
Foreseeing whether or not a judge will uphold a covenant not to compete is generally difficult. Even if the employee's interests may be significant Hawaii 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 Honolulu 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, the covenant not to compete must have a valid business purpose which is behind the employer's motivation for requiring the agreement.
Do I Need an Attorney when Dealing with a Covenant not to Compete?
Before signing anything that may restrict your rights, you might want to hire a Honolulu, Hawaii attorney to review the contract. A lawyer can then negotiate to modify the covenant as needed, or might even draft a new one that is acceptable to both parties A lawyer can also render useful advice for employers who are contemplating suing an employee for breach of covenant, or they can counsel employees who have signed such an agreement.