If you`re considering taking a job with a new employer, or starting a new business with someone else, you may be asked to sign a non-compete agreement. But what exactly is a non-compete agreement, and what do you need to know before signing one?
A non-compete agreement is a contract in which you agree not to compete with the employer or business partner during or after your employment or partnership ends. This means that you are prohibited from starting a competing business, or working for a competing company, within a certain period of time and geographic area.
Non-compete agreements are commonly used in industries where employees or partners have access to sensitive information or trade secrets, such as technology, finance, and healthcare. Employers or business partners may use non-compete agreements to protect their investments and prevent employees or partners from taking clients, customers, or trade secrets to a competitor.
However, non-compete agreements can be controversial because they can limit a person`s ability to find new employment or start a new business. Some argue that non-compete agreements stifle innovation and entrepreneurship by preventing talented individuals from using their skills and knowledge to start new businesses or work for competitors.
If you`re asked to sign a non-compete agreement, it`s important to read it carefully and understand its terms. Consider consulting with a lawyer who specializes in employment or business law to help you understand your rights and obligations under the agreement.
Some key things to look for in a non-compete agreement include:
1. Duration: How long the non-compete agreement will be in effect. Some agreements may prohibit you from working for a competitor for a few months, while others may prohibit you for a year or more.
2. Geographic area: The geographic area where the non-compete agreement applies. Some agreements may prohibit you from working for a competitor within a few miles of your current workplace, while others may prohibit you from working for a competitor in an entire state or region.
3. Scope: The scope of the non-compete agreement, such as what specific activities you are prohibited from engaging in. For example, some agreements may prohibit you from working for a direct competitor, while others may also prohibit you from working for a company that indirectly competes with your current employer.
4. Compensation: Whether you will receive any compensation for agreeing to the non-compete agreement. Some employers may offer additional compensation or benefits to employees who sign non-compete agreements.
In summary, a non-compete agreement is a contract that prevents you from competing with your employer or business partner for a certain period of time and geographic area. If you`re asked to sign a non-compete agreement, it`s important to understand its terms and seek legal advice if necessary. While non-compete agreements can help protect an employer`s or partner`s interests, they can also limit your career and business opportunities.