Employment agreements may contain covenants not to compete, which restrict your employment options upon separation. Generally speaking, it’s not illegal – or uncommon - for a company to ask its employees to sign a non-compete agreement after hiring them. Whether that new agreement is enforceable may depend on several issues. Before signing a new agreement, talk with a lawyer to learn your rights, obligations and options.
A poorly drafted non-competition clause, such as one that is overbroad or reaches further than the law allows, can stop you from working. And a company may erroneously accuse you of breaching a non-compete clause when, in fact, you have not.
A non-compete agreement must be reasonable in time and geographic scope. It cannot restrict the employee’s right to compete for too long. It cannot restrict the employee’s right to compete in too large a geographical area. The restrictions must be designed to protect a legitimate purpose, such as confidential information and customer relationships.
Each state has its own laws regarding covenants not to compete, also called “restrictive covenants.” Although the states’ laws are generally similar, they are not identical. Talk with a lawyer licensed in your state to learn how the law applies to your situation.
