Employee Right - Non-compete agreement

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.