Our employment attorneys draft, review, and handle cases involving non-compete and non-solicitation agreements throughout Maryland, Washington DC and Northern Virginia.
What is a Non-Compete Agreement?
A non-compete agreement is a contract between an employer and an employee that prevents the employee from competing with the employer after the employee leaves the company. This agreement generally prevents the employee from going to work for a competitor, or opening his own business if it involves the same profession, client base or prospects, or the same area of expertise that the employer’s business focuses on. From the employer’s perspective, it has invested a great deal of effort and money in building a client base, perfecting processes, inventions, trade secrets and customer lists, and as a result, it wants to protect this information often by using a non-compete agreement. If an agreement is in place, and the employee goes to work for a competitor, not only can the employer potentially sue the former employee for breach of the agreement, but may also sue the competitor, when it has been put on notice of the agreement, but hires the employee anyway. This fear of a lawsuit may cause new employers to be hesitant about hiring the employee unless it gets a waiver of the agreement from Employer number 1.
Because the impact of a non-compete agreement is to limit the employee’s ability to earn a livelihood, Courts do not favor them. Such agreements must be very narrowly drawn and the restrictions truly tied to vital business interest(s) of the employer. They must be limited geographically and in the length of time they are in effect. If the agreement limits an employee’s business or employment interests for an unreasonable amount of time or extends to a job or market that is not in competition with the employer, it is highly unlikely that it will be enforced. There are no specific rules as to how large the geographic or time duration limitations must be. These rules vary depending on the type of job and should be fair to both the employer and the employee. Employers must also clearly define their business and the business interests that the agreement is designed to protected e.g. trade secrets.
Non-solicitation agreements are the sisters of non-competes. Unlike competition from the departing employee, this contract is concerned with the employee trying to pursue customers or clients, prospects, vendors or suppliers, and in many cases coworkers from joining the employee at his new company or enterprise.
Should or Must an Employee Sign a Non-Compete Agreement?
An employer may choose not to hire you if you refuse to sign an agreement, or may try to take legal action against you if you do not sign one upon leaving. However, in some states you may the have the right to refuse to sign a non-compete agreement, and if an employer threatens to terminate you for not signing, then your rights may have been violated.
New employees often do not realize the consequences of entering into such an agreement, assuming that their employment relationship will run smoothly and all will live happily ever-after. Other employees sign non-compete agreements with the mistaken assumption that they are unenforceable. Since these assumptions are not always true, a non-compete agreement should be negotiated with the same vigor as one negotiates salary or any other key aspect of one’s employment.
If you need the help of an experienced employment discrimination lawyer, personal injury or insurance attorney in Maryland, Washington DC or Northern Virginia, please contact the Law Offices of Stuart L. Plotnick, LLC in Rockville, Maryland