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Can my employer force me to sign a Non-Compete Agreement?

All of these employment forms to review and sign before you start a position. From reviewing company policies to signing benefit enrollment forms, the onboarding process can be arduous. Now you have this non-compete agreement to review and sign. If you sign it, you are agreeing that you will not compete with your employer by engaging in any business of a similar nature, as an employee, independent contractor, owner, part owner, significant investor, and whatever other forms of competition your employer identifies to cover its bases. If you do not sign it, doing so may cost you a job or your current job, if your current employer now wants you to sign an agreement that did not apply to your employment before. If the employer is unwilling to give up on the agreement or rework the agreement to better suit you, you may not be hired, or you may be fired if you are already employed.

Whether it is legal for your employer to deny you a job or fire you will depend on the facts of each individual case and will vary state by state depending on each state’s laws. It may also depend upon the reasonableness of the non-compete agreement. While non-compete agreements are analyzed under state law, and each state is different, there are some common factors that courts look at to determine whether a non-compete agreement is reasonable:

  1. Does the employer have some legitimate interest it is protecting with the non-compete agreement?
  2. What is the geographic scope of the restriction? Will it keep you from making a living
  3. How long is the non-compete agreement in force?
  4. Does the agreement keep you from doing a type of work very different from what you had been doing?
  5. Did the employer provide you with additional compensation or benefits in return for getting your agreement to sign the non-compete?

It is not enough that your employer simply doesn’t want you to take your skills and abilities to a competitor. There needs to be some good reason for the non-compete. For example, if the employer introduced you to all its best customers, it may have a legitimate interest in keeping you from going to a competitor and luring those customers away. The goodwill developed in terms of customer relations, gives the employer a competitive advantage. They may want to prevent you from capitalizing on it, thus they are entitled to protection. Or, if you gained certain confidential knowledge that you would inevitably use in the course of working for your new employer, a court may find that to be a legitimate reason to uphold a non-compete agreement. Each state has its own standards with respect to the validity of non-compete clauses. For specific information on a state’s non-compete laws, it is best contact an attorney.

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