Executive, sales and service employees are sometimes required to sign agreements when hired restricting their right to work for a competing employer for a year or more if their employment is terminated, whether voluntarily or involuntarily. These agreements can restrict a former employee from soliciting former customers, co-workers or vendors for a competing employer, and expose a prospective employer to liability for hiring an employee subject to such restrictions. Employees and prospective employers can also be held liable using proprietary information developed by the employee while working for the former employer (e.g. customer lists, marketing materials), regardless of whether they signed any agreement restricting their post-employment agreement. While this seems unfairly to restrict an employee’s right to freely pursue their livelihood, courts frequently uphold such restrictions intended to protect an employer’s investment in an employee’s training and development to those reasonable in time and geographic scope depending upon the employee’s scope of influence. For example, nationwide restrictions might be overbroad, but restriction on soliciting specific clients may be enforceable in Court. For this reason, consulting a lawyer prior to signing such non-compete provisions is important to understand and negotiate less restrict post-employment restrictions, or to defend post-employment litigation to enforce overbroad restrictions.
Non-Compete RestrictionsRichard Dodd2018-05-17T19:51:21+00:00