I imagine it is probably only worth it if you have an huge job offer waiting for you and you cannot afford to pass it because of the non-compete. But how about if you do NOT have such an offer and you just don't agree with the compensation offered by the employer during the non-compete?
If you do not agree with the compensation offered by the company, it might be helpful to consult with 1 or more employment attorneys who would be able to give you guidance, offer suggestions, and help you negotiate a better deal. As far as cost, each attorney or firm quotes their own fees so there is no way to tell you in this forum what if would cost.
You are thinking of the question backwards -- ordinarily, you would first get another job, and then your former employer might found out and sue. That is, you wouldn't have the incur the expense of a lawsuit unless the former employer finds about about the non-compete and sues to enforce it. (There is a process to preemptively sue, called suing for a "declaratory judgment," but you likely wouldn't want to do that here.)
So, this is what you should do. First, talk to a knowledgeable attorney (like me) about the non-compete clause and whether it would likely be enforceable. Then, consider that information coupled with practicalities: how likely would the new job be considered really a "competing" job? Or the former employer find out and sue? Armed with all of that information, you would be able to search for the sorts of jobs that would keep you on the right side of the law.
The Blue Pencil Doctrine
“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.
A non-compete agreement is one in which one party agrees not to compete professionally with another party.
A trade secret is an idea, process, or formula that gives the owner a competitive edge, and certain laws protect them from becoming public.
Written by attorney Mark Campanella
When someone is starting out in a new job, one of the last things on his mind is what happens if and when things dont work out with that employer. Things are all shiny and new, and most... more
Get free answers from experienced attorneys.
26,881 answers this week
3,189 attorneys answering
Get answers from top-rated lawyers.
26,881 answers this week
3,189 attorneys answering