A
non-compete agreement is a promise by an
employee not to compete with his/her employer for
a specified number of years in a specific geographic
location. The agreement is either a clause in an employment
contract, or is a separate contract.
Employers often require employees to sign a non-compete
agreement to deter them from quitting and joining
a competitor. The agreement prohibits the employee
from competing with the company while they are at
work. Sometimes it also requires employees to agree
not to start their own businesses or go to work for
a competitor, for a specified number of years after
they leave their present job.
Validity of non-compete agreements
The agreement’s validity depends on the state
law. In some states, a non-compete agreement is not
legal, because those states do not want to prevent
employees from working for anyone they like. The non-compete
agreement might be enforceable in some states, but
only if it's reasonable in scope and necessary to
protect the company's interests.
Breaching the non-compete
agreement
If employees have signed a non-compete agreement
and do not want to comply with it, they should find
out the validity of such an agreement in their state.
If employees violate a valid agreement, their former
employer might sue them and recover the money that
it lost because of the breach of the contract not
to compete. They may also be able to stop the former
employees from operating a new business or going to
work for a competitor.
