The employee cannot be terminated as an act of retaliation. Sometimes employers shy away from firing employees for refusing to sign a noncompete or other employee contract and instead create a hostile work environment in the hopes that person will leave on their own.
There are several ways an employee contract of this sort can be negated. The employer must have a legitimate business interest in having the employee sign the agreement. That means that low-level clerical staff, who do not participate in major decisions for the company, are not subject to agreements. As another example, an accounting software company cannot keep a salesperson from selling other forms of software, not related to their product or industry. Donna M. Contact Donna M.
Email Us! Employment Law Articles. Here are just some of the ways that an employee can defeat a non-compete agreement: Employer breaches the contract : Many non-compete provisions are part of an employment contract spelling out compensation, insurance and other conditions of employment.
If the employer breaches the agreement by failing to pay all compensation due, failing to fulfill the insurance requirements, or failing to meet some other obligation, the employee is relieved of all obligations under the contract.
And many employers put changeable provisions like insurance in a contract that says it may only be amended by writing signed by both parties. If something in a contract is a provision the employer wants to be able to change, then either leave it out of the contract, or put the fact that the employer may unilaterally change insurance policies without the need to amend the contract.
No legitimate interest to enforce: Many employers attempt to overreach their legitimate business interests, and this is one of the most common mistakes. For instance, an employer has no legitimate interest in enforcing a non-compete against low-level employees such as receptionists and clerical employees.
An employer who manufactures computer software for accountants has no legitimate interest in preventing an employee from working on software for doctors. An employer who is phasing out of an area has no legitimate interest in preventing an employee from working in that area. An employer who abandons a particular customer, area of business, or product has no legitimate interest in the area it abandoned.
In between, the employer will have to prove that the time period is reasonable. However, most courts will assume that agreements up to 2 years are reasonable. Question My employer is insisting that I sign a noncompete agreement, preventing me from working for competitors if I leave.
Answer You certainly aren't alone. An agreement may be held unreasonable because it: lasts for too long covers a geographical area that is too large is too broad in the types of business it declares off limits to the employee, or applies to employees who never had access to the employer's trade secrets or other valuable information in the first place.
In this situation, there's no compelling reason to allow the employer to prevent the employee from working for a competitor. If your employer asks you to sign a noncompete when you're promoted to a new position, it's reasonable to ask for money to compensate you for the rights you are giving up. Keep in mind, though, that this will almost certainly prevent you from later claiming that the clause should not be enforced against you. Because you got something valuable for signing the agreement, you probably won't be able to get out of it later.
If presented with a noncompete clause, demand that it take effect only if you leave the job voluntarily. Otherwise, the clause could limit your employment opportunities if you are fired or laid off. Ask for the prohibited competition to be clearly identified and limited. Many employers fear competition with only one or two specific companies and will readily name their names in your agreement.
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