WHAT DOES A NON-COMPETE CLAUSE MEAN?

Author: Valentina Krasniqi Published: April 2021

Before you start working at a company, the HR department representative will most likely give you a contract to sign. This contract will contain benefits, rules of the company and a non-compete clause. You may wonder is a non-compete clause and how does it affect my future job opportunities? This blog will explain what a non-compete clause is and what it means about future employment.

A non-compete clause, also known as “restrictive covenant”, is used by employers to limit an employee’s freedom to pursue a similar profession if and when the employment relationship ends.Non-compete clauses are generally enforceable only when very narrowly defined. In order to be enforceable, the restrictions of the non-compete (a) must be necessary to protect legitimate employer interests; (b) must be temporally and geographically reasonable in scope; (c) must not be contrary to the public interest; and (d) must be supported by consideration; i.e., the employee must receive something in exchange for signing the agreement. The burden of proof falls on the employer to show that the non-compete fulfilled these requirements, and courts will usually not pare down overly wide restrictive covenants; they will merely find them unenforceable.

In all, look at your state laws to make sure that you are not signing a document that can hurt your future. If you truly don’t understand what you are signing, please contact a lawyer to look over your contract. Do not sign anything if you do not know what it is asking for. Remember to negotiate what is in your best interest as the company only have their best interest in mind. What happens after you sign your contract and decide to leave the company?

Either one of two things happen. First, the company does not care at all about the non-compete clause and lets you go without any trouble. The second, is the company tries to hold the non-compete clause. Your next step is to read, or have a lawyer read, the contract. Some clauses have in place that your ex-employer will have to pay for your salary if you do not work there. Remember your state laws on non-compete laws and contact a lawyer. Protect yourself because the company will not.

BestLogic Staffing hopes this blog helps you understand your rights as an employee.

Citations

https://www.kmblegal.com/resources/non-compete-agreements#:~:text=A%20non%2Dcompete%20agreement%20is,when%20the%20employment%20relationship%20ends.&text=Non%2Dcompete%20clauses%20are%20generally%20enforceable%20only%20when%20very%20narrowly%20defined.