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What are Noncompete Agreements?

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In many cases, employers will ask employees to sign contracts called noncompete agreements, which state that the employee cannot work for a competitor or launch a competing business for a certain amount of time following the end of the employment relationship. Why? Such contracts exist to limit the competition that an employer or business can face from those individuals who have intimate knowledge of the business.

Additionally, these agreements allow the employer to control former employees after they leave the company, which goes against the country’s traditions of free enterprise and the right to make a living. For this reason, many states do not permit these types of agreements, and those that do, may not enforce noncompete agreements that last for a long period of time, cover too large of a territory, or otherwise limit an individual’s rights to move on to a new profession in order to make a living.

Noncompete Agreements Should Be Reasonable

States who do allow noncompete agreements only honor those created in a reasonable manner. For this reason, noncompete agreements are only enforced if they are limited in the following ways:

  • Time: The agreement must not be unreasonably long. In most cases, contracts that last up to two years are more likely to be upheld than agreements that are much longer.
  • Area: The agreement is likely to be upheld if it is only limited to a specific geographical region.
  • What is considered competition: The agreement should be made only to prohibit an employee from launching a new business in the exact field the employer occupies or for a specific list of direct competitors

Because these contracts can limit an employee’s ability to make a living, they should only be signed if it is necessary to the employer’s business.

Have Concerns About Signing a Noncompete Agreement or One You Have Already Signed?

If an employer or potential employer has asked you to sign a noncompete contract and you have questions or concerns regarding this action, we urge you to get in touch with our Memphis employment lawyers at Donati Law, PLLC right away. We can examine your situation and inform you of the best strategies given your circumstances. If you have already signed an agreement and are worried that the agreement may be hindering your future, we believe it is best for you to call us right away. Our Memphis employment attorneys are backed by ample experience and knowledge and can work diligently to safeguard your future.

To speak with a Memphis employment lawyer regarding your case, call Donati Law, PLLC.

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