What You Need to Know About Non-Compete Agreements.

Article By Patrick Mansfield | Best Rated Law Firms | 03/20/2023

  • What You Need to Know About Non-Compete Agreements

    1. Understand What Is Included in the Non-Compete Agreement: The agreement should clearly and carefully detail what activities are prohibited, as well as the duration of the restrictions.


    2. Consider Your Options if You Are Asked to Enter Into a Non-Compete Agreement: Talking with a lawyer can help you to understand how such an agreement might fit into your career plans.


    3. Examine Existing Laws: Some states offer greater protections for employees than other states do, so it pays to do some research on your state's laws.


    4. Think About Severance Options: If you're asked to sign a non-compete agreement and you feel uncomfortable about it, try to negotiate for additional severance options in exchange for your compliance.


    5. Determine If You Can Negotiate Suitable Terms: If you're willing to enter into a non-compete agreement but want certain changes made, try to discuss them with the other party before signing on the dotted line.


    6. Revisit and Renew: As circumstances change, consider revisiting and updating your non-compete agreement accordingly to ensure that both parties are still in agreement with its terms and conditions.

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It's important to have a basic understanding of non-compete agreements if you're entering into a business in the modern world. Non-compete agreements, also known as restrictive covenants or restrictive employment contracts, are becoming increasingly common in many areas of law. As an employer looking to protect yourself from competition or an employee looking to understand your rights, it is essential for you to know what a non-compete agreement is and how it works.


What Is a Non-Compete Agreement?


A non-compete agreement is a contract between two parties that prohibits one party from competing against the other within a specific geographic area and duration of time. The purpose of this arrangement is to protect the business's interests either through maintaining exclusive access to resources or controlling their competition. It can also be used to reward employees who have been loyal and worked hard for the company while ensuring they do not take advantage of their gained knowledge at another place of employment.


When Do Non-Competes Apply?


Non-competes can apply in any situation where an individual has access to confidential information or proprietary technology obtained at their place of work which could prove valuable elsewhere should they leave their job. Crucially, those employed in managerial roles typically enter into this kind of agreement with the intent that they will not use the proprietary information studied while with one employer to benefit their new position down the line.


Are Non-Competes Enforceable?

The enforceability of such agreements depends on several factors listed below:

  • The scope: The courts usually take account how wide reaching terms are in determining whether an agreement is valid. For example, if a radius is specified over which services may not be provided then it therefore needs to be realistic for it to stand up in court;
  • Reasonable: The courts will decide whether an agreement restricts someone unfairly when looking at the context within which freelancers might generally work (or be able to work);
  • Necessary: Restrictive covenants need only cover necessary activities rather than simply serving as protectionism from future competitors - i.e., if there genuinely is no possibility someone else will compete against them directly then why include such details.



Therefore whilst not all non compete agreements have legal standing some do, so understanding what yours says before signing is key - or seeking legal advice if uncertain - before proceeding based on different circumstances being presented at any given time.

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