Successfully navigating the job market has become increasingly difficult in recent years due to the downturn of the economy and the slow recovery that has been taking place. As a result of these economic factors, some businesses are strong-arming potential candidates into signing unfair contractual obligations in an effort to take advantage of their upper hand.
One of the methods that employers will use to protect their business and get the most out of their employees is to compel some candidates to sign a non-compete agreement. This is a binding agreement filled with nuanced legal jargon that people should understand fully before signing on the dotted line. With this in mind, there are a few important facets of non-compete agreements that everyone who is contemplating a new job situation should consider.
A Non-Compete Agreement is Not the Same as a Non-Disclosure Agreement
Many people simply lump these two agreements together without understanding that the two agreements are actually different. While it’s not unusual for someone to sign both agreements in the same contract, the differences between the two agreements are important.
A non-compete agreement means that a former employee is not able to compete against their former employer. This could be specified by a geographical radius or a certain length of time. A non-disclosure agreement is not meant to reduce competition; however, this agreement controls the ability of the former employee to discuss certain information related to the company, its products, its plans for the future, or its financial information. This agreement is usually used to prevent other companies from gaining inside information on the status of the business.
Is the Non-Compete Agreement Actually Enforceable?
When people sign a non-compete agreement, they may not fully understand the ramifications of what they’re signing. A typical non-compete agreement has two specifications. First, the non-compete agreement will specify a certain length of time during which the former employee cannot “compete” with the former employer. This could range from a few months to a few years.
The second side of the agreement will specify the radius within which the employee would be specified to be “competing.” This radius could be the city, the state, or even a larger radius. If the agreement specifies an undue length of time or unnecessarily wide geography, the agreement may not be enforceable. It is important to investigate this point before signing a non-compete agreement.
Why Exactly is the Person Leaving?
The reasons why an employee may eventually want to leave the job affected by the non-compete clause will have major impacts on whether or not they should sign the non-compete agreement in the first place. For example, if a doctor is leaving to open a practice in the same specialty of medicine, signing may be a poot idea because it may ultimately impacts their ability to practice in their chosen field in a given area. On the other hand, if the physician is undergoing a career change, it might not be that important because they won’t be practicing in the same field anyways.
Non-compete agreements are loaded with legal complexities that can be difficult to understand. Contact an experienced attorney for guidance concerning all major contracts before you sign on the dotted line. If you need to contest the provisions of a contract you have already signed, an attorney can help you with this task as well.
