After purchasing 16 newspapers in 2011, the Halifax Media Group asked their new employees to sign an agreement preventing them from working for other media companies in other cities with Halifax properties for two years if they left the company.
This sort of agreement is called a “non-compete agreement,” or “restrictive covenant.” These agreements prevent former employees from going and working for competitors, limiting the chances that the employee will share trade secrets or other inside information with the competing company.
If an employee violates a non-compete clause, he or she can be subject to monetary fines or other penalties. Non-compete clauses can make it quite difficult for employees to find a future job or even become self-employed. However, they usually have no choice but to sign the agreement. The employer has all the power.
Some states, for the reasons stated above, highly restrict non-compete clauses and some states—like California—don’t allow non-compete clauses at all. Non-compete causes differ throughout the various states. Some principles that are common in most states, though, include:
Before you sign a document containing a restrictive covenant, you should consult with an attorney who has knowledge and experience in this area. The lawyers of Deutsch Atkins & Kleinfeldt, P.C. are experienced employment litigation attorneys who can provide the advice you need regarding non-compete agreements.