Many new hires sign employment contracts before starting work. Like other Michigan residents, you may wonder if a non-compete agreement is a fair addition to an employment contract.
What exactly is a non-compete agreement? According to FindLaw, this portion of an employment contract is meant to protect the financial and business interests of an employer by curtailing the competition of former employees. Many employees think non-competes are unfair because of their potential to limit their ability to earn a living after they leave the company. As a result, courts may enforce only non-compete agreements that are reasonable and fair to employees. The points in a typical non-compete agreement that you may see can include the following:
- You agree not to take a position or start a new business in the same industry within a certain geographical scope, such as within five miles of your previous employer.
- The agreement may also include a time frame you will not work in a nearby competing industry, such as three to five years after leaving employment.
- You agree not to disclose confidential trade secrets or client information to competitors.
Which elements could make a non-compete agreement unfair? Such an agreement that might not hold up in court may be one that restricts you from working in the same field in a neighboring state, extends the time period past five years or otherwise attempts to restrict you from working in the industry at any point during your career. Like other elements of an employment contract, non-compete agreements can be complex to understand and to enforce in court. Therefore, this information should not replace the advice of a lawyer.