NonCompete_PraciticalRisks

NON-COMPETES: THE PRACTICAL RISK

March 17th, 2018 Posted by

Whether it is a new job or an existing one, you may be asked at anytime to agree to limit where you may work or what clients you may contact after your employment ends.  The question is not whether these “restrictive covenants” are enforceable but what effect will they have on your career.

Legally, whether a non-competition and/or a non-solicitation clause in your contract is enforceable is dependent on a variety of factors such as the nature of your position, whether you were compensated for it, your industry, how you acted upon your exit, etc.  (i.e., restrictive covenants are more enforceable against a CEO then an IT manager given their relative value to the company).

However, the real harm from these agreements is a practical one. Regardless of whether a non-compete/non-solicitation restriction is enforceable,  if you are restricted by such an agreement you are less valuable when compared to others who are not similarly restricted. It is also very unlikely that you will be able to conceal from your future employer that you have signed such an agreement.  Most employers ask their new employees whether they are subject to any such restrictions and/or require you to warrant that you are not before hiring you.  In addition, it is extremely expensive to litigate their validity.  Even if you chose that route, the time period would likely lapse before you got a favorable decision from a court.