Restrictive covenants, also known as “non-compete” and “non-solicit” covenants, are a staple of many employment contracts. Many employers use these covenants in an attempt to protect their competitive edge in the marketplace.
At Zeilikman Law, we approach non-compete issues with logical and creative solutions. Our lawyers are, professional, friendly, and determined. We have the know-how to navigate through the psychology of any given non-compete dispute.
The Difference between Non-Competition & Non-Solicitation Provisions
Employers often share important confidential information with their employees, and at the commencement of the employment relationship, want to include provisions in an employment contract that brings a reasonable level of protection to their commercial interests.
A non-compete covenant refers specifically to where one party to the contract, most often the employee, agrees not to practice or start a business in a similar capacity in competition with their former employer.
A non-solicit covenant, on the other hand, normally refers to the employee’s restrictions on the right to solicit clientele or employees of the employer after the end of the employment relationship, for a defined period.
At the heart of restrictive covenants lays the principle that it would be unfair for one to use sensitive information or other insider knowledge in competition against a former employer unfairly. Such a provision usually carries some geographic or temporal limits on the prohibition, but it remains a crucial tool for employers to protect their business against unfair competition.
I signed a non-compete and/or non-solicitation agreement, can it be enforced?
Restrictive covenants, specifically non-competition agreements, are notoriously hard to enforce and their legal validity may always be subject to the careful scrutiny of the courts. This is because they have the potential to do significant harm to employees.
For example, it is harmful where an employer is trying to stop a person from practicing in their chosen trade. Non-solicitation agreements may be enforceable easier. However, the terms need to be clear, unambiguous and reasonable in light of the employee’s position, knowledge, and responsibilities.
The courts look to determine if the terms of the clause are unreasonable or unnecessary to protect the legitimate business interests of the employer by examining the geographic scope, the length of the restriction, and the scope of the prohibited activity. Many employees often enter into agreements paying little attention to enforceable restrictive covenants.
Conversely, many employees needlessly abide by restrictive covenants that are unconscionable, unreasonable and unfair for fear that they may be sued. If an agreement is unenforceable, the courts will treat it as if you never signed it.
How can Zeilikman Law help?
It is important to speak to an employment lawyer before making any decisions regarding how to interpret your agreement. If you have questions regarding a signed non-competition or non-solicitation provision (whether it can be enforced or whether you should sign such an agreement), contact one of our experienced employment lawyers today to set up a consultation to discuss your options.
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