Non-compete agreements, in the employment context, are meant to protect the interests of the employer. When a company shares its ideas and business practices with its employees, which is inevitable, a non-compete agreement prevents the employees from later using those ideas and practices for the benefit of a competing business. Often, though, non-compete agreements end up creating a nearly insurmountable obstacle for employees seeking subsequent employment.
Your non-compete agreement may be unenforceable
Courts typically express a general disapproval of non-compete agreements as many of them impose very harsh restrictions on an individual’s right to earn a living. In Part 1 of this blog series, we discussed several useful strategies for fighting non-compete agreements. Here, we will continue to discuss some of the successful arguments that can be made by employees if they find themselves bound by an unnecessarily restrictive non-compete agreement.
No. 4 – Does the non-compete agreement actually serve your employer’s interests?
One mistake that employers make when drafting non-compete agreements is using a one-size-fits-all approach. The terms of one non-compete agreement might be suited for one particular type of business or industry, but not for another. The same may be true for specific employees because, depending on their job description, the restrictions may not be necessary or reasonable. An important basic requirement of enforceable non-compete agreements is that they serve the legitimate business interests of the employer.
No. 5 – Does it include a “choice of law” provision?
A “choice of law” provision determines which jurisdiction’s laws will control the enforcement of the agreement. The parties to the agreement can predetermine which jurisdiction that will be by including a provision in the agreement selecting the controlling jurisdiction. This is important because a non-compete agreement that may be enforceable in one state may not be in another state. The remedies that are available for violations of the agreement may differ as well. So, regardless of whether you are working in Alabama, the laws of another state may be applicable to your agreement. If you have questions, discuss your non-compete agreement with a Birmingham employment attorney.
No. 6 – Are the terms of the non-compete agreement outdated?
Something that employers may forget to do is periodically review and update the provisions of their non-compete agreements. When a business makes important changes to its operations, when the industry standards change, and when the laws governing the business or governing non-compete agreements change, the provisions of the non-compete agreement may need to be modified as well. If the agreement is not updated, then it may no longer be relevant to the legitimate interests of the employer’s business. That could make the non-compete agreement unenforceable.
If you feel you have been the victim of discrimination or retaliation in the workplace, or if you have any other questions regarding your employment rights, please contact the experienced employment law attorneys at Wrady & Michel, LLC. You can contact us either online or by calling us at (205) 265-1880. We are here to serve you