Generally by signing a covenant not to compete, an employee agrees that if she leaves the employer, she will not go to work for the employer's direct competitors. The employee will sometimes receive compensation for signing the agreement. Covenants not to compete are also known as "non-compete clauses."
Businesses that typically use Covenants not to Compete include those dealing with:
Typical Restrictions in a Covenant not to Compete agreement may relate to:
It is difficult to determine whether a judge will enforce a non-competition agreement. While the secrets of an employer are valuable, the legal system also places value on an individual's freedom to pursue other employment. To be enforceable Courts usually require that a covenant not to compete be reasonable.
A convent not to compete will be considered unreasonable (i.e. not enforceable) when:
Before signing anything that may restrict your future employment access, it is wise to have an attorney review the document. An attorney can also help draft a covenant not to compete, or negotiate the terms of such a covenant. An experienced business lawyer can advise you on whether you can sue an employee for breaching a covenant not to compete, or whether you can go work for a competitor.
Last Modified: 04-26-2018 11:27 PM PDTLaw Library Disclaimer
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