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Freedom Quest: Unlocking Career Shackles-The Many Ways Employment Non-Compete Agreements Can Be Rendered Unenforceable [By Jeff Isaac] Hundreds of thousands, if not millions, of working professionals throughout America have signed a non-compete agreement at one point or another during their careers-not by choice but, rather, due to employer job requirements. Often, the bottom line is simple: sign the agreement as is or forego the job opportunity altogether.
•
Geographic Scope: Non-competes that
is deemed adequate consideration. So
binds the employee to not compete, directly
have too large of a geographic scope
the odds are in favor of those required
or indirectly, with the employer and/or
are more likely to be denied by the
to sign non-compete agreements well
work for a competitor after termination of
courts. While this is still subjective to
after their employment start dates. And
the employment relationship. For courts,
the court’s opinion on the matter, an
if the employee is already a part of the
however, the definition and enforceability
argument can surely be made if the
organization, the agreement is not likely
of this document is not so clear-cut. Such
region the non-compete agreement
to be enforced by the courts unless the
agreements are rife with legal loopholes and
covers is all-encompassing.
employer makes it readily apparent
By definition, a non-compete agreement
“gray areas” that are contingent upon the
that it offered additional consideration•
Duration: Many states are more likely
salary increase, improved benefits,
from one employer to another. The merit of
to void an unreasonable restriction
etc.-beyond the job itself in exchange
these documents can also vary from state to
rather than modify it. For example, if
for the constraints it sought to place
state, with some states-but not all-classified
a two-year duration is specified in the
upon him or her.
as “right-to-work” territories, rendering some
agreement and the court considers
non-compete agreements null and void.
this duration unreasonably long, it may
drafting and implementation, which can differ
Far too many job seekers do not read or
•
State and Local Laws: In some states,
nullify the restriction entirely rather
non-competes are not legal and will
than upholding it for a shorter duration.
not be supported by the courts. In
entirely understand the fine print of non-
California, for example, a non-compete •
Activity Scope: If the employer has
agreement is only enforceable with
know what constitutes one that is rightful
been too broad relative to the activities
respect to the sale of a business.
versus one that is wrongful. While it’s
it is attempting to restrict, then the
Employers in this state cannot,
understandable that employers want to
courts will likely rule in your favor.
however, restrict the livelihoods of their
establish a measure of security against unfair
Often, non-compete agreements are
current or former employees.
competition by former employees, these
considered unreasonable if the intended
documents are often far too restrictive with
scope is beyond that related to the
respect to the professional’s right to earn
company’s direct competitors and
not a court will support a non-compete
income within the industry where his or her
established customers and/or clients.
agreement might also depend on why
compete agreements and do not inherently
skills are most applicable.
•
Departure Considerations: Whether or
you left the company. For example, •
Consideration of Compensation:
if your employer fires you for “good
How does an employee know if he or she is,
Courts are also unlikely to enforce
cause” or if you quit to take a new job,
in fact, truly bound and restricted by a non-
a non-compete agreement if the
it might be enforceable. But if your
compete agreement he or she has signed?
opportunity for adequate consideration
company fires you or if you resign for
Here are some of the many shortcomings that
is not provided at the time of signature
reasons beyond your control, such
can render a signed non-compete agreement
so that an informed decision can be
as company-wide layoffs, permanent
non-enforceable:
made at that time. At the onset of an
disability, and the like, the court may
employment arrangement, the job itself
not enforce a duly signed non-compete
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About the Author:
agreement. If, however, you have been
thus achieving mental servitude, or hoping
fired for “good cause” or if you resign to
to otherwise intimidate their new hires
take another job, you may be out of luck.
in attempts to protect their companies’
Jeff Isaac, Esq., a.k.a. “The Lawyer in Blue
interests. Therefore, even if you have signed
Jeans,” is a veteran attorney who offers
While some employers know all too well
a non-compete agreement, do diligence to
down-to-earth legal perspective on issues
that their non-compete agreements are not
see what rights you do or do not have with
affecting individuals-and society at large-on a
enforceable in a court of law, many often
respect to your specific draft of this so-
day-to-day basis. He can be reached through
require new hires to sign them anyway,
called employment contract-you may be
his website at www.LawyerInBlueJeans.com.
hoping their employees will not know the
free of those “shackles” to seek whatever
documents are not legally binding, and
employment you desire after all.
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