Employee Non Compete Agreements
An employee non-compete agreement is a contract in which an employee promises not to compete in business with his employer. Those with specific non-compete questions should consult an attorney.
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Scope
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The scope of a non-compete agreement varies based on its language. Employers usually ask employees not to work for a competing company or open a competing business within its geographic area.
Purpose
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Some employers wish to protect their investment in training an employee by making sure that investment will not simply vanish before it pays dividends. Others simply want to keep a potentially talented employee from working for the competition.
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Contract Law
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A non-compete agreement is a legal contract, bound by all the creation and execution requirements of contract law. In addition, the non-compete agreement may not be used to impose servitude upon an employee. Courts decide whether a non-compete agreement has done so.
Enforcement
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A non-compete agreement acts as a restraint on trade and competition; consequently, courts will construe such an agreement narrowly. In most jurisdictions, a valid non-compete agreement must be very limited in geographic radius and duration (typically no more than a year).
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References
- "Cases and Materials on Contracts, Sixth Edition"; Farnsworth, E. Allan and William F. Young, Jr. and Carol Sanger and Neil B. Cohen and Richard Brooks; Foundation Press; 2002
- Law Memo: Law Memo: Covenants Not to Compete; Wirtz, David M.
- Restatement (Second) of Contracts, Section 188: Ancillary Restraints on Competition
Resources
- Photo Credit contract 20309 image by pablo from Fotolia.com
