February 5th, 2017
I had two questions on non-compete agreements last week. Both readers asked for examples of non-compete agreements as if there is some right way to write one.
Over the years everyone I’ve talked to about non-compete agreements they’ve signed have found themselves in a disastrous situation after wanting to work on their own.
My advice on non-compete agreements or clauses is:
- Avoid getting involved in non-compete agreements if at all possible.
- Check out the laws in your state on non-compete agreements.
- If you think you must sign a non-compete agreement be totally honest with your employer and negotiate an agreement that is reasonable. There is no right way to do it. The terms are negotiable.
Here are some facts that bear on this issue:
- Laws that regulate non-compete agreements vary widely country to country and state to state. In the US non-compete agreements are regulated by state laws so you have to research the situation in your own state. In California, non-compete agreements are illegal and unenforceable except in very limited situations. Other states have laws that make non-compete agreements easier to enforce. It would probably be worthwhile to get some local legal advice.
- In most locations, a non-compete agreement only applies to an employee, not to an independent contractor. If you really are an independent contractor non-compete agreements may not apply to you.
- Courts generally insist that non-compete agreements be reasonable to be enforceable.
What is your experience with non-compete agreements?