You may have received a job offer that gives you everything you want and some things you have not even thought of. Such offers are not uncommon in high-end professions. However, your compensation package may come with a catch. Your prospective employer may want you to sign a non-compete agreement. The latter will prohibit you from working for rival companies in the same industry or line of business for a certain amount of time. You should consider this condition carefully before you sign the agreement. It may seem like a small sacrifice to make now, but you do not know whether your relationship with the company will last; and you don’t want your options for finding another job unfairly hindered.
Before signing you should hire a Florida non compete attorney at law such as Cantrell Zwetsch. Non-compete agreements interfere with America’s competitive labor market. Courts generally do not like them, and employers must meet exacting standards for judges to uphold such agreements. A non-compete agreement is a restrictive employment covenant, and you should understand how it will limit your right to work elsewhere if you break with your prospective employer.
Why Companies Insist On Non-Compete Agreements
The main motivation behind non-compete agreements is customer relationships. If you are in a high-end profession, you probably have to build relationships with clients. If you go to another company, there is a chance that you will take those clients with you, which can be a heavy blow to a company. The argument from the employer side is that you used their name and resources to establish such relationships, and that a rival company should not be allowed to profit from this.
Employers also want to protect trade secrets and proprietary information. As an employee, you will gain insight into how the company works. You may even become familiar with methods and techniques that have proven effective. You should not be allowed to transfer this information to a new company—so your employer will argue. Even if you did not divulge specific information or trade secrets from your current company to a new business, it is impossible to empty your brain of all that you have learned about the former. Your knowledge can be used by a new company to the great disadvantage of your old one, especially if the two companies are in direct competition.
Are Non-Compete Agreements Enforced?
As has already been said, courts do not like non-compete agreements. It can take years of expensive litigation to enforce one. However, most companies use non-compete agreement as a deterrent. They believe the threat of a drawn-out lawsuit will make people think twice before leaving for a rival company.
In any case, courts consider and weigh a range of facts before ruling on a non-compete agreement. The main aim of the judge will be to balance the interests of the employer with those of the employee. They will look at what the agreement is trying to protect. If the sole purpose is to protect trade secrets or the company’s investment in advanced scientific and technological breakthroughs, then the court may be sympathetic to the company. Some courts are also inclined to support non-compete agreements that protect long-term customer relationships. But they are disinclined to support agreements that prevent normal competition.
Courts also lean against non-compete agreements that significantly hinder an employee’s ability to earn a livelihood. A non-compete agreement cannot prevent you from transferring skills that you earned on your own to another company.
The duration of the restriction is also taken into consideration. The length of time that you are not allowed to compete with your old company must be reasonable. To determine what is reasonable, the court will again look at what the company is trying to protect. If they are trying to protect a formula or design, then the courts may enforce a non-compete time period that allows the company to make the product. If the information or relationship that is being protected is more volatile, the court is unlikely to support a lengthy non-compete time period.
Your Options If Asked To Sign A Non Compete Agreement
If you are asked to sign a non-compete agreement, you will probably need to sign it if you want the job. However, you need not sign the document as is. You can negotiate the terms of the non-compete, and you should hire a Florida non compete attorney at law to help you do so.
Most companies do not put a great deal of effort into the development of non-compete agreements. They present prospective employees with a form that was written for them by company lawyers years ago. Many of the terms and conditions of such an agreement may not even apply to your position or may be outdated. Do not simply sign what is handed to you. Tell your employer you want to review the document and get back to them. You should then take it to your lawyer for a thorough assessment. Some of the items you should look for include:
1. The Definition Of Competition
The prohibitions should be defined as narrowly as possible. An agreement that says you cannot use proprietary information in any job you take with a new company is reasonable. An agreement that prohibits you from using any of the general knowledge, skills, and experience you have gained on your own is unreasonable. A clause that contains such restrictions should be modified to protect your professional and personal interests.
2. Geographic Restrictions
If the business you are in is localized or caters to a local market, it may be reasonable for you to sign a non-compete clause that prohibits you from working for a local competitor for a term of two years. For example, if you are taking a job as a reporter or producer for a local news station, your employer is in direct competition with other local stations and will want to protect its standing. However, the company cannot ban you from working for a broadcaster elsewhere in the nation.
3. Customer Restrictions
If there are restrictions of this kind, you should ensure they are limited to customers you had contact with during your employment—specifically, any long-term company customers or customers with whom you have engaged in the last six months of your employment. You should also ensure that the prohibition does not apply to customers that you brought to the company.
Your main aim here should be to build in protections in the event that you are fired. Your lawyer can help you work in a language that will shorten the duration of the non-compete. For example, you can insist that the length of the restriction be equal to the number of weeks that you receive severance pay.
It can be hard for employers to prove that there has been a violation of a non-compete agreement. However, they can ask for significant amounts of money in damages for such a violation. Some agreements are so draconian that they specify that an employee who violates a non-compete agreement repay the profits made to the employer and pay the employer’s attorney fees. You should ask that such provisions be eliminated.
Your skills and talent may be in such high and immediate demand that you are hired and put to work without completing all the formal paperwork, including the non-compete agreement. You may be asked to sign one after you have been on the job for a while. If you find yourself in this situation, you should use it as leverage to secure a raise or promotion.