Basic Facts About Non-Compete Agreements

Employers use non-compete agreements - also known as covenants not to compete - to help protect their business interests. Typically, an employee agrees not to compete against his employer in a similar profession or trade as a condition of employment. The idea is that a non-compete agreement prevents an employee, upon termination or resignation, from working for a competitor or starting a business and gaining an advantage by using his former employer's trade secrets, client lists, business practices, or upcoming products and marketing plans.

Non-Competes Can Be Problematic

The problem with non-compete agreements is that employers write them with their own best interests in mind: they want the agreements to apply broadly, with little or no concern about how they might impact an employee's career. What is worse, while employers have skilled attorneys draft their agreements, few employees take the time to consult with their own legal counsel before signing.

Employees May Have Options

Many employees believe that non-compete agreements are iron-clad and that they have no choice but to honor their terms, no matter how onerous. This, however, is not always the case. While the majority of jurisdictions in the United States recognize and enforce non-compete agreements, most will find overly broad agreements - i.e., agreements without reasonable limitations with respect to the geographical area and time period during which an employee may compete - unenforceable.

Some states look beyond simple geographical and temporal scope to determine whether a non-compete agreement is enforceable. For example, Virginia courts typically examine the following to determine the validity of these types of agreements:

  • Whether the agreement, from the perspective of the employer, is reasonable in the sense that it is no greater than necessary to protect the employer in some legitimate business interest
  • Whether the agreement, from the perspective of the employee, is reasonable in the sense that it is not unduly harsh or oppressive in curtailing his legitimate efforts to earn a livelihood
  • Whether the agreement is reasonable from the perspective of sound public policy

Of course, determining the law that governs a particular non-compete agreement can be difficult and the advice of an experienced employment law attorney can be invaluable in helping to establish an employee's obligations.

An Employment Law Attorney Can Help

If you or someone you love is facing a dispute with a former employer regarding a non-compete agreement, contact an experienced employment law attorney. A knowledgeable employment law attorney can assess your case and help you assert your rights. For more information, contact an employment law attorney today.