Answered Rather than getting generic advice from an online forum, you should consult an experienced labor and employment lawyer in your area. Your lawyer can review the agreement and your company's employment manual and advise you whether or not the agreement would preclude you from accepting the new employment offer.
Disclaimer: This answer is provided for informational purposes only, does not constitute legal advice, and does... more
Disclaimer: This answer is provided for informational purposes only, does not constitute legal advice, and does not create an attorney-client relationship. Actual legal advice can only be provided after completing a comprehensive consultation in which all of the relevant facts are discussed and reviewed.
“Blue penciling” occurs when a court decides not to enforce certain sections of a non-competition agreement that it considers too broad, but still enforces the rest of the agreement. Instead of declining to enforce the entire agreement altogether or rewriting unenforceable provisions, the court will literally cross out gramatically severable, unreasonable provisions but keep the rest of the agreement intact “It’s illegal to prevent someone from getting a job.” Yes, but getting a job where? A non-compete agreement that is reasonable in time and distance is enforceable. So, what’s “reasonable” you ask?
It depends on the employer’s geographic customer base. Let’s say that you sell shoes in St. Charles, Jefferson and St. Louis counties. Could you enforce a non-compete in those counties for the sale of shoes, i.e. prevent your former salesman from being employed as a shoe salesman in those counties? Yes, absolutely. Does it prevent your former salesmen from getting a shoe sales job outside of those three counties ... no. Protecting your customer base in those counties is not preventing your former employee from gainful employment in the rest of Missouri and 49 other states …. and that’s reasonable under the law of non-competition.If you want to know the effect of a noncompete clause, you need to see a lawyer. The differences between one state's laws and another's can significantly affect the answer. And which state's law applies is a separate issue entirely, one that must be addressed in multi-state arrangements.
The particular facts of your case may help you or hurt you, and even minor variations in your employment arrangement can affect the legal situation.
In this article, we examine some of the issues employees should be aware of when trying to get out of a noncompete contract. Next week, we'll take the employer’s perspective. If you’re a manager, what do you need to consider if you want your staff members to sign a noncompete?
Confidential information is protected
First, you have to look at what, exactly, is being limited by your contract. The scope of prohibited work is what’s important. That description may mean the difference between whether your noncompete will be upheld by the courts or thrown out.
If the noncompete contract discusses prohibited trade secrets or confidential business information, perhaps you can work in a related area as long as those items are not compromised.
Knowledge about existing customers might be the key. You may have agreed not to solicit or go to work for current customers of the company.
The more closely the scope protects special, proprietary aspects of your employer's business, the more likely it will be that you can’t get out of it. Even in states with laws that disfavor noncompete agreements, the courts will more likely uphold the agreement if it’s written in a narrow way to protect proprietary information.
However, if the scope of the prohibited work is too great or too ambiguous, courts sometimes will view that noncompete as unreasonable. A ruling may find that a broadly written contract is against the public interest of competition in the marketplace or that it's in excess of legally permitted limits.Here’s where it gets tricky: What is a “reasonable” restriction? Most of these agreements broadly restrict “practice of chiropractic.” In regard to time period, in most cases, two years or less would be considered a “reasonable” time to prohibit you from practicing.
The distance restriction is more problematic, since it depends on the area. In an area that has a lot of people, such as a suburb, the area of restriction might be no more than five miles. In a rural area, the restriction might be as much as 25 miles.
Non-compete agreements are written based on the concept of “restraint of trade.” If the non-compete unreasonably restricts the former employee’s ability to practice (that’s restraint of trade), it isn’t going to be upheld.
The materials available at this web site are for informational purposes only and not for the purpose of providing... more
The materials available at this web site are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an attorney-client relationship between Howard Roitman, Esq. and the user or browser. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.