Caution on Employees Signing Non-Competition Agreements

I have seen many employees, especially young people, having problems or losing sleep after they sign non-competition agreements while accepting a job offer. The problem is especially acute among young adults, who are glad to receive a job offer but do not pay close enough attention to what they are signing. Many are signing their rights away. Some mention their concerns to their new employer, who replies not to be worried about it since the employer does not enforce those non-competition provisions anyway (which is not a satisfactory answer).

When presented with a non-competition agreement, keep in mind that these agreements have severe consequences to your rights in the future and can potentially cause major problems if not properly negotiated. Accordingly, when asked to sign an agreement with non-competition provisions in it, be sure and consult an attorney before signing it.

When I review such agreements for employees after they have been presented with the agreement from a new employer, I am generally successful in having the non-competition agreement stricken and instead replaced with the employee agreeing not to solicit certain customers of the new employer for a reasonable period of time (such a restriction if properly limited can be reasonable, as opposed to a non-competition agreement which in some circumstances can be unreasonable). Non-competition provisions, for example, can be reasonable if the employer agrees to pay a severance to the employee equal to the amount of time he or she is unable to work in his or her preferred line of work while he or she waits for a non-competition restriction to end.

Some employees find that they will be working in a different line of business, but most commonly it is the same or a similar business and a non-competition agreement can adversely impact their right to earn a living in the field of his or her choice.

This is an issue I have seen time and time again. Georgia law in the last few years has been changed to allow greater enforcement of non-competition agreements.

Accordingly, it is imperative when presented with such a non-competition agreement not to sign it, and consult an attorney to help negotiate it to something that is more reasonable such as a narrowly-drawn non-solicitation provision. Often, when the new employer is presented with the concerns of a new employee, the non-competition restrictions may be deleted (or replaced with a less restrictive and more reasonable non-solicitation restriction). The employer usually appreciates the concerns of the new employee.

  1. Leave a comment

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: