What is a Non-Compete Agreement?
If you have been offered a job, you may be asked to sign a non-compete agreement. A non-compete agreement is a type of employment contract between the employee and employer. This document restricts a person’s employment opportunities should they decide to part ways with the company. For example, you may be prohibited from working within 20 miles of your former employer for a certain amount of time, such as one year, two years, or longer. Employers use non-compete clauses to avoid situations in which a former employee is using knowledge of the previous company to help further the new company. Employers want to restrict this type of competition whenever possible. While technology companies typically require non-compete agreements, they are present in all industries. Even hairdressers, janitors, and retail and fast food employees have been asked to sign such agreements.
While you do not legally have to sign a non-compete agreement, not doing so could cost you your job offer. If you are asked to sign an agreement after you are hired, you could lose your job. This will depend on whether or not the agreement is reasonable.
Is the Non-Compete Contract Reasonable?
Non-compete agreements limit one’s job opportunities for a period of time, but even then, such an agreement can be deemed unreasonable by the courts. For example, an agreement forbidding an employee to work for a competitor within a 100-mile radius for five years would likely be considered unreasonable, since the person would either have to move or commute a long distance in order to find work in the same field. However, an agreement that is effective for a period of time ranging from one to five years is considered reasonable.
There also needs to be a good reason why the employer requires a non-compete agreement. They can not simply state that they do not want you to work for a competitor. There must be a valid reason, such as customers. If you have access to the company’s biggest customers, then there is likely some fear that you will take these customers away if you leave. Also, if you learned confidential information about the company or its products, the company has a good reason to limit your employment with a competitor.
Before signing a non-compete agreement, read it carefully. Understand the terms and restrictions. You will be bound to it once you sign it, so if you do not agree to any of the terms, discuss this with the employer. If they are unwilling to budge, and you find the agreement highly restrictive, then it may be in your best interest to not sign it and walk away.
Contact a New York Employment Contracts Lawyer
Many employers require non-compete agreements and other contracts nowadays as they fight to protect their proprietary information and trade secrets while reducing competition. Employees should ensure that they fully understand these contracts before signing, as these documents can affect future job opportunities.
If you have already signed a non-compete agreement or another type of employment contract, the experienced New York employment contracts lawyers at Ricotta & Marks, P.C. can help you negotiate the terms so they are more beneficial and do not seek to prevent employment. Call our office at (347) 464-8694 to schedule a consultation.