Starting a new job is an exciting time full of new opportunities for growth and learning. The challenges that come with learning a new set of processes and approaches help an individual to become more agile and capable of new skills. However, something that comes up that complicates a new beginning is a non-compete agreement.
For a non-compete agreement to be enforceable, it must have a reasonably limited amount of time and geographic scope while protecting an employer’s business interests. Let’s go over the situations when you can challenge a non-compete agreement if a former employer raises the issue.
No Violation of Terms
For a non-compete agreement to be legitimate, it must be specific. If you can show your new job wouldn’t violate the terms of your former contract, there should not be a problem. Get a copy of your new contract and your old one to be sure of the exact terms.
If a contract is too broad or does not fit the specific business (a practice several small companies use), employees can challenge the agreement. For example, a company cannot block you from working in the same industry or a similar position in another state where the original company does not do business. Similarly, if the company operates in a niche of an industry, they cannot bar you from the entire sector of work.
As for insider knowledge and proprietary information, the time limitation must be reasonable. A company could ask you not to work in the industry for the remainder of the fiscal year. But keeping you out for several years, especially in continually changing industries such as high-tech, is unreasonable.
Wide Availability of Property Deemed “Proprietary”
Companies legitimately need to protect their trade secrets to remain competitive. But when that information is publicly available or widely accessible, you have much better grounds for a challenge.
Employer Breach of Contract
In many cases, there is often a connected part of the non-compete agreement to the employment contract. If you can provide evidence that the employer did not follow through on the terms of employment, the non-compete agreement may not be enforceable.
Show Termination Without Cause
Mass layoffs or being terminated without cause may void a non-compete agreement.
The legal experts at Pitt, McGehee, Palmer, & Rivers have experience helping people in the Metro Detroit area navigate transitioning into new jobs. If you believe you are caught in an unfair non-compete agreement, give us a call today to chat through your options.