Is a Non-Compete Agreement Valid If You Are Fired?

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When you get a new job, your employer might require you to sign a non-compete agreement. This limits your options for employment after you leave your job. If you are fired, your agreement could still limit what you can do. The type of agreement you sign determines whether it is valid if you are fired.

What is a Non-Compete Agreement?

  • Many employers require employees to sign a non-compete agreement either when they are hired or at some point during their employment. This is a document that prevents employees from leaving the company and going to work for a competitor. The purpose of a non-compete agreement is to keep trade secrets from going to a competitor through a former employee. The non-compete agreement can limit employees from working for competitors within a certain geographic radius for a specific amount of time.

Enforced if Fired

  • When you sign a non-compete agreement, the enforceability of the document does not depend on why you leave a company. If you voluntarily leave or if you are fired, you still cannot go and work for a competitor, as a general rule. The employer still has trade secrets that he does not want to let go to a competitor. When employees are fired, they may be angry and more likely to give up trade secrets. Because of this, most agreements are still in place even if you are fired.

Breach of Contract

  • Even though a non-compete agreement can still be enforced when you are fired, you could potentially get out of it if the employer breaches your contract. For instance, if the employment contract that you signed when you began working for the employer included compensation and benefits that were not paid, you can get out of the non-compete agreement. You can also get out of the agreement if the employer fired you for a reason that is not just or fair.

Protecting Trade Secrets

  • The primary purpose of making employees sign non-compete agreements is to protect trade secrets. If the information that the company is trying to protect is readily available to the public, you can avoid the enforcement of the non-compete agreement. If the company does not really have any special trade secrets, you can sometimes get out of your non-compete agreement. If you do not have access to the information after you leave the company, you may not be held by the terms of the agreement.

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