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Non-Competition Agreements: Overview
Reasonableness is a Key to the Agreement
In deciding whether to enforce a non-competition agreement, the court will balance the need to protect the employer's legitimate business interests with any burden that enforcement of the agreement would place on the employee.
Non-competition agreements must be reasonable in duration and scope. The reasonableness of the duration of the agreement will depend on the specific facts of each case. For instance, if the non-competition agreement is designed to protect confidential information, the duration should be no longer than the time for which the information has value. The geographical area covered by the agreement must also be reasonable considering the circumstances. This will depend greatly on the services provided by the employee, and the importance of the services to the employer's business. Generally, courts will not allow a non-competition agreement to prevent an employee from working in a geographical area where the employer does not do business.
If a court finds that a non-competition agreement is overbroad, it may narrow the scope and duration of the agreement and enforce it as modified, or it may refuse to enforce the agreement entirely if it finds that it was clearly intended to prevent legitimate business competition by the former employee.
Non-Competition Agreements: Getting Legal Help
Employers have a right to protect their relationships with their customers and their confidential information, but former employees have a right to earn a living. When the employer and the employee have entered into a non-competition agreement, these interests must be balanced. If you have questions related to the enforcement of a non-competition agreement with a former employer, speak with an experienced employee rights attorney to ensure that your legal rights are protected.
FAQs
- If the employer's handbook states that employees will be fired only for just cause, can the employer still fire someone at will?
- How does a worker apply for Unemployment Insurance (UI) benefits?
- What workers are covered under the Unemployment Insurance system?
- I have no written contract, but my employer told me that as long as I perform my work well I'll have a job. Can my employer fire me even if I'm performing my job well?
- Are there any laws that affect an employer's ability to fire employees at will?
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