What You Need to Know About Signing a Non-Compete Agreement
Non-compete agreements can be difficult to navigate once signed. Here’s everything you need to know about non-compete agreements.
What is a Non-compete Agreement?
A non-compete agreement is a contract between an employer and employee prohibiting employees from working or opening a business in a competing industry for a certain period after leaving their job. Non–competes may be part of an employee’s contract or a stand-alone document part of an employee’s onboarding.
Legality of Non-competes
Non-competes are legal, enforceable documents. An employer may create and mandate an employee to sign a non-compete so long as the non-compete.
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- Protects the employer’s legitimate interests
- Does not produce undue hardship on the employee
- Does not harm the public
- Reasonable in time and geographic location
A court will not enforce non-compete contracts greater than necessary terms. Further, a court will not enforce a non-compete that is proven unnecessary.
Do I have to sign a non-compete?
If the potential employer mandates a non-compete agreement, the employee must sign the contract. However, like with any contract, the terms of a non-compete are negotiable.
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Consider the following questions before signing any contract:
- What businesses do you view as competitors?
- How long does the non-compete last?
- Are there any geographical restrictions? If so, what is it?
- Are there any incentives for signing the non-compete? If so, what are they?
- Can a lawyer review the non-compete?
- How can a non-compete affect the employee?
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