A non-compete agreement is an effort by employers to prevent an employee from taking trade secrets to a competitor when they leave. Typically, the agreements will specify the geographical area that the former employee is prohibited from working in, and the time limit of the prohibition. Business owners may require a signed non-compete as a term of employment. Many times when an employee wants to change employers for more money, better position, or other reasons, they seek ways to circumvent or break the non-compete.
Is It Binding?
For a non-compete to be binding, both parties must have signed it. The company must have a representative who has the proper authority sign. If you are seeking relief, this is the first place to look before taking further action. Without both signatures, it will not be upheld by a court if the employer tries to take legal action.
Does It Make Sense for Your Role?
Some companies may have a blanket policy to have prospective employees sign non-compete agreements. If you have been in an entry-level position, it is doubtful that you were privy to any information that could hurt the former employer or help the new employer. In this instance, if you wish to take a higher-level role in a new company in the same industry, try asking the current employer for a release.
Did You Receive Consideration?
For a non-compete to be valid, you must have received additional consideration for signing it. In other words, you should have been given something in return, like a higher salary or a signing bonus. If you were not compensated, or if you did not receive promised compensation after signing, the agreement may be invalid.
Where Do You Live?
North Dakota and California have outlawed non-compete agreements. If you live in one of those states, you should be free to seek employment wherever you wish. An employer has no way to enforce a non-compete agreement in those states.
What is Your Profession?
If you are a physician, check your state laws. In some states, physicians are not covered by non-compete agreements. Attorneys are not subject to non-compete agreements in any state.
Try Negotiating Terms
If you have already received an offer and are determined to leave, try approaching the current employer to negotiate your release. Perhaps the terms of the non-compete could be renegotiated in a way that protects both you and the company you are leaving. If you are able to come to terms, make sure it is all in writing.
If you have signed a non-compete and wish to vacate it, consult an experienced business lawyer, like a business lawyer in Melbourne, FL, to see how to protect yourself.
Thanks to the Law Offices of Arcadier, Biggie, & Wood, PLLC for their insight into what you need to know about breaking a non-compete agreement.