Should I Sign a Noncompete Agreement?

You've just been offered your dream job. The salary is great. The location and hours are perfect. You've even got an expense account. Congratulations!

There's just one catch. Buried among the documents you've been asked to sign is an agreement not to compete with your employer. Should you sign it?

Before you do, ask yourself the following questions:

Can I do this job on my own, without this new boss/company?

Am I bringing my own customers/clients to this new job?

Will they hire me if I refuse to sign?

Will they give me additional compensation in exchange for signing?

Have they enforced agreements like this against other former employees?

What are the penalties for violating this agreement?

You've probably heard that noncompete agreements are not enforceable. That is a widely held, and erroneous, belief. If a court determines that your noncompete agreement is "reasonable" and is necessary to protect the legitimate business interest of your employer, you may find yourself on the wrong end of an injunction or a significant money judgment. If you've joined a competitor of your former employer, you may even drag your new boss into your lawsuit. 

Prior to signing such an agreement, consult with experienced counsel. Discuss the precise language of the proposed agreement with your lawyer. You may be able to counter-propose a less onerous post-employment restriction. Now is the best time to negotiate your employment arrangement with your new boss. She likes you. You wouldn't have the offer if she didn't. Talk to your lawyer, and then get out there an enjoy your new opportunity!

 

 

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Kevin Burke

Kevin Burke is a partner in the Litigation, Labor & Employment Practice Group at Lippes Mathias Wexler Friedman LLP. EDUCATION: J.D., George Washington University Law School Georgetown University - B.A., magna cum laude Nichols High School School (Buffalo, New York) EMPLOYMENT: Lippes Mathias Wexler Friedman LLP - A partner in the Litigation Practice Group INTERESTS: Member, Nichols School Alumni Board Past Board Member and Officer, Western New York Trial Lawyers Association Bennett High School's Law Magnet Program Bar Association of Erie County Annual Mock Trial Tournament Attorney Coach Past Member, Kiwanis Club of Buffalo Past Member, Child & Family Services Annual Fund Board Leadership Buffalo Graduate, Class of 2006