Understanding What Noncompete Agreements Can And Can't Accomplish

Employers and employees have certain rights and obligations in regard to noncompete agreements. Litigation and liability arise when an employer or an employee fails to understand what their obligations and rights are under the law.

At the Law Offices of Gary A. Costales, P.A., we advise and represent clients in regard to the drafting, review, negotiation and litigation of matters related to noncompete agreements.

In any dispute related to a noncompete clause, the most important issue is enforceability. Are the terms contained in a contract reasonable? Do they impose an undue burden on an employee that impedes his or her ability to rightfully earn a living? Avoiding legal problems in regard to noncompete agreements begins with understanding what sorts of restrictions a contract can reasonably impose on an employee.

The Terms Of A Noncompete Agreement And Enforceability

In general, the following components of a noncompete agreement will determine if it is enforceable or not:

  • Geographical restriction: Is the geographical limitation contained in the contract too broad? Does it create an undue burden on the employee for finding other employment where he or she currently lives or works?
  • Job restrictions: Are the kind of employment restrictions exclusive to working for current competitors or recruiting from current client lists? Or, do the job restrictions mentioned include companies and functions that are not linked to competitors?
  • Length of noncompete agreement: Does the duration of a contract provide reasonable protection for an employer's short-term business interests? Or is it meant to remain in effect beyond the time period needed to adjust to the loss of a particular employee?
  • Restrictions on investment opportunities in a competitor: Does a noncompete agreement place unnecessary restrictions on the ability of an employee to invest in a competitor?
  • Function or status of employee: Does the employee serve an essential function within the company? Do his or her job responsibilities warrant a noncompete?

Avoiding liability in matters related to noncompete agreements begins with understanding the issue of enforceability and how the court has typically chosen to treat noncompetes. Attorney Gary A. Costales will help you understand the issues involved and the changing contours of employment law that continue to impact decisions in these matters.

Clarity On Noncompete Issues Starts With A Phone Call

Call 877-389-7395 or use the online contact form on this website to schedule a free phone consultation.

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