Non Compete Agreement and Your Job Search
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If you have a non compete, it is important to understand how it may restrict you before you begin your search for a new job. Even if your former employer does not threaten enforcement of the agreement, new employers frequently ask candidates if they have non competes, and ask to review them before making or finalizing an offer.
Understanding the Restrictions in the Non CompeteBefore assessing whether and to what extent the agreement can be enforced against you, it is important to understand the scope of the restrictions as written, and what you can and cannot do if the agreement were enforced.
This can help you compare options in your job search, as those that do not conflict with the non compete will be safe options, while those that might will carry more risk. Some key things to look for: How does the agreement define "competitor"? Some agreements case a broad net, identifying anyone within a certain industry as a competitor. This may call the enforcement of the provision into question, but on paper could bring a lot of potential new employers into question. Others are more specific, referencing companies that provide a certain product or service in the same geographic region as the company. You may be able to mark some prospective employers "safe" in this case, based on whether their specific products or services match up with what your company offers. Is the geographic area defined? If the agreement covers a specific region (i.e., Massachusetts or New England) and your prospective employment is outside of that region, you are likely in the clear. What are the non solicitation obligations? Separate from the non-compete, the agreement likely contains a restriction on soliciting and/or doing business with company clients or prospects. You should check to see if the agreement limits you only from soliciting customers you did business with, or whether it more broadly refers to any customer of the company. |
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Telling the New Employer About the Non Compete
Should you tell the new employer about your non compete? This choice may be taken out of your hands, as many prospective employers now ask candidates if they have any post-employment restrictions.
Even if not asked, there are good reasons to disclose the agreement. If you have read the agreement and believe the restrictions (if enforceable) would apply to this opportunity, it is usually better to have that discussion ahead of time. If your new employer is not willing to take the risk of hiring you with the agreement, you should know that before you accept a job and give notice at your old job.
Even if not asked, there are good reasons to disclose the agreement. If you have read the agreement and believe the restrictions (if enforceable) would apply to this opportunity, it is usually better to have that discussion ahead of time. If your new employer is not willing to take the risk of hiring you with the agreement, you should know that before you accept a job and give notice at your old job.
Asking for a Waiver of the Non Compete
Some new employers will make a job offer contingent on getting a waiver, or release, of your non compete from your former employer. This puts you in a difficult situation- you can't start the job without the waiver, but it is easy for your former employer to say no.
You can certainly ask your employer. Sometimes, if the company you are going to is not someone the employer truly views as a competitive threat, they will agree. Other times there are things you can compromise about- for example, not contacting certain customers, or limiting your role in the new company for a period of time.
More often, however, it will be necessary to retain counsel who can help identify potential enforcement problems in the non compete, and assess any other potential legal issues you had with your former employer. They can help you decide whether the best course of action is to write a letter to your former employer, or work with counsel for your new employer to help get them comfortable with the level of risk they would be assuming by moving forward.
A third course of action, if you are really stuck, is to go to court yourself and seek a declaratory judgment that the non compete is unenforceable. This is a way to force the issue, if you are stuck between a new employer's need for assurance and an old employer's inaction or refusal to agree. It is more costly, however, and guarantees litigation.
You can certainly ask your employer. Sometimes, if the company you are going to is not someone the employer truly views as a competitive threat, they will agree. Other times there are things you can compromise about- for example, not contacting certain customers, or limiting your role in the new company for a period of time.
More often, however, it will be necessary to retain counsel who can help identify potential enforcement problems in the non compete, and assess any other potential legal issues you had with your former employer. They can help you decide whether the best course of action is to write a letter to your former employer, or work with counsel for your new employer to help get them comfortable with the level of risk they would be assuming by moving forward.
A third course of action, if you are really stuck, is to go to court yourself and seek a declaratory judgment that the non compete is unenforceable. This is a way to force the issue, if you are stuck between a new employer's need for assurance and an old employer's inaction or refusal to agree. It is more costly, however, and guarantees litigation.
How We Can Help
We can help you understand the terms of your agreement, and develop a strategy for moving forward. You can use the b utton below to schedule a free information call, or call us at (781) 784-2322.
