Clients often ask us, “How do you get out of a non-compete agreement?” Since non-compete agreement law is fact-based and dependent on state law, this is a very difficult question to answer in a general manner. With that said, there are a few common doctrines embedded in state non-compete law that help shed light on the question, “How do you get out of a non-compete agreement?”
- Non-compete agreements must protect an employer’s reasonable competitive business interests. What is considered reasonable is a fact-based analysis, and it is typically determined by analyzing the business interests of the employer. Courts examine the employee’s skill set to determine whether there is a reasonable competitive business interest; the less skilled the employee, the less likely the Court will hold that the non-compete agreement protects the employer’s reasonable competitive business interests. While courts have held that protecting confidential information is a reasonable competitive business interest, generally speaking, employees are allowed to use the general information that they learned through their employment. Finally, preventing against general competition is rarely seen as a legitimate business interest in most states whether the former employee did not steal confidential or proprietary information from his or her former employer.
- Non-compete agreements must be limited in time. Typically, states will uphold non-compete agreements of up to three years in length. With that said, this varies by state and is highly dependent on the factual situation.
- Non-compete agreements must be limited in geographic scope. Non-compete agreements must be limited enough in geographic scope so that they protect an employer’s reasonable competitive business interests without creating a prohibition on employment that does not protect those interests. Courts have upheld nationwide non-compete agreements where the employer’s reasonable competitive business interests extend across the United States. Additionally, courts have invalidated 60 mile restrictions, which again shows that this is a very fact-based issue.
- Non-compete agreements must be limited by type of employment. Typically, non-compete agreements will be found to be reasonable where the restrict a former employee from working with or taking the former clients of an employer for a reasonable period of time. Broad restrictions on working for a former customer, however, have been invalidated. So have broad restrictions on working within a certain profession. Generally speaking, employees have a right to make a living within a specific profession, but that right is subject to limitations where an employer’s reasonable competitive business interests may be at stake, such as in the case of stealing clients or soliciting current employees.
As noted above, non-compete agreement issues are very fact dependent. Consequently, if you are asking, “How do you get out of a non-compete agreement,” then it is important to contact an attorney so that he or she may advise you on how you can best mitigate your risk in your new employment. Contact Revision Legal’s non-compete agreement lawyers today at 855-473-8474 or complete the contact form to the right.
