I feel like I’ve written a lot about legal issues. Again, I am not a lawyer so when confronted with these issues be sure to consult one. However, I deal with this stuff so often, I feel compelled to share. Ultimately, lawyers help us define business terms in a way that protects us from all sorts of nasty stuff. From warrants and reps to indemnification and assignment, structured agreements are a necessity.
Non competes can be daunting if you are asked to sign one. Some things to keep in mind are how specific the agreement is and how long is the non compete in force. Regardless of which side of the table you are on, you want to be specific when it comes to non compete agreements. If you sign or write an agreement that is overly broad, it will be less likely the agreement will be enforceable. I’ve signed a few that pretty much say, you agree not to compete with us in any respect for what we do today and anything we might imagine to do in the future. It’s too broad and it won’t stand. Non competes also won’t work if you are being asked to refrain from doing what you do for a living. If you’re an electrician, for example, a non compete is not likely enforceable if you’re being asked to not do what you do for a living. Now, say, you are an electrician that does a specific installation based on your employer’s proprietary method, that’s a different story.
The next thing to consider is how long your non compete is in force after you leave the company. If you have highly specialized training or information this period can be as long as three or more years. if you’re a generalist, I wouldn’t expect that period to last more than 6 months. Remember, you may be required to sign a non compete as a condition of employment, but you can always try to negotiate its terms.
If you find you are being asked to sign a non compete, be sure to review it carefully and employ competent counsel for their opinion as well. Don’t just sign this kind of document carte blanche. Read it, understand the terms, negotiate better terms if possible and most important understand its enforceability in general and in your state in particular. The peace of mind you’ll gain by going through these motions can be invaluable.
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