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Employment Contracts: How Non-compete Agreements Work

By William Chanfrau, Jr. on September 23, 2016

Signing an employment agreementHere at Chanfrau & Chanfrau, our focus is on the people of Daytona Beach. We want to help those in this city in their time of need, whether this means providing legal representation after a serious injury or providing legal help and services to examine employment contracts. Our lawyers are here to help.

Sometimes when starting a new job, your previous employer may express issues about your new employer. Such cases tend to involve overreaches of a non-compete agreement with your previous employer. Let's explore the issue in greater detail.

What Is a Non-Compete Clause?

Also known as a covenant not to compete (CNC), a non-compete clause (often NCC) is an agreement reached between and employer and an employee. In basic terms, the non-compete clause in an employment contract states that an employee will not simultaneously enter into a profession or start work that is in competition with their own employer.

A non-compete agreement is often part of a new hire;s contract with a company, though in some cases it may also apply after that employee leaves their employer for a reasonable amount of time.

Protection for an Employer's Proprietary Information

The primary reason that a non-compete clause is in place in many employee contracts is to protect an employer's proprietary information and special training from being used against itself. This is standard practice in many industries, particularly when businesses have trade secrets, select client lists, or confidential information that they would like to keep away from others.

When Is a Non-Compete Clause Overbroad?

While a non-compete clause is generally understandable with current employees, they can go overboard following the release or termination of an employee. If that employee is kept from making a living because of a non-compete clause that lasts after parting ways with a company, it may be considered an overreach.

These kinds of issues regarding non-compete agreements tends to lead to legal disputes over the timeframe and geographic parameters of the agreement. Since the language of these agreements can be complex, the scrutiny over the wording of the non-compete clause can be quite contentious.

Reasonable Duration for a Non-Compete Clause

This can vary from industry to industry and from situation to situation. If a former employee does not intend to use proprietary information or insider information in their new position, they should not be subject to restrictions on employment in a similar industry. However, in some cases a restriction of up to two years in locations where the employer regularly does business may be considered reasonable.

How an Employment Lawyer Can Help

Matters such as these can be quite complicated, as you can imagine. Having a skilled employment lawyer available to examine the language of a non-compete clause and to assess the nature of a person's new position is helpful. Working with an attorney familiar with employment contract disputes can lead to a faster and smoother resolution of an issue compared to going it alone. The peace of mind and the ability to return to the workforce unimpeded is worthwhile to many.

Speak with an Employment Attorney

For more information about non-compete agreements and how our team of attorneys can help you in your time of legal need, be sure to contact a skilled employment lawyer today. The lawyers of Chanfrau & Chanfrau are here to help you in your time of legal need.

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