Before You Sign A Non-Compete Agreement...
Often to a new employee, an employment contracts is similar to a pre-nuptial agreement. Everything looks rosy and you can not imagine a breakup. Worse, you feel like the potential employer has all the power. After all, they are the ones who will be giving you that much-desired paycheque. The employee negotiates the important requirements like salary and benefits and signs on the dotted line without seeking legal counsel or even turning his or her mind to what will happen in the event of a break-up.
As usual, I recommend that you seek legal advice before signing any contract. It might cost you a few dollars but save you considerable amounts in the future things do not work out.
If you decide not to obtain, legal advice, consider the effect of the non-compete you might be signing. Many employment contracts contain a provision that you may not compete with the employer or do business with the employers customers for a certain period of time following the end of the employment relationship. These provisions make sense from the viewpoint of the employer. After all, it does not want you developing a relationship with a key client/customer and then taking that client/customer with you if you leave. The employer is trying to protect it's asset - the valuable relationship with the client/customer.
But what happens if you are not leaving by choice (you were terminated) and the client wants to hire you? In this case, you are out of luck in that you are out of work and can not take the job with the client/customer because of the non-compete. The best you can hope for is that, if you ask the employer permission, they will agree to let you take the new job. It might work, but it might now.
It makes sense, therefore, to ask the prospective employer to modify the non-compete to state that if the employer terminates you, without wrongful conduct on your part, you can compete or work for the client/customer. Alternatively, you could negotiate that if you are terminated, the period of the non-compete is shortened significantly. Both of these changes will protect you while still protecting the employer. The employer might not make the change, in which case you will have to evaluate whether you still want the position, but it also may accept the change realizing that you are making a reasonable request to protect your interests if things do not work out.
The Lesson: Take a few minutes before signing the employment agreement to think about how the different provisions will apply if or when the employment ends and whether those provisions will make it more difficult for you to find alternate employment.
The content and the opinions expressed here is informational purposes only and does not constitute legal or professional advice. Nor does reading or commenting on it create a lawyer/client relationship with the author. I encourage you to contact me directly at adrianlawoffice@gmail.com if you have specific legal questions or concerns.
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