Above all, it is a question of the courts preventing unfair trade restrictions. In a free market, most firms cannot reasonably invoke the need to restrict competition. Many states will evaluate each part of an agreement with the „Blue Pencil” doctrine of severability, according to which some parts of the agreement may be considered enforceable and others as unenforceable. However, some states throw an entire deal overboard if it turns out that some of them are an unfair trade restriction. If you are not sure what the non-competition clause means, do not be ashamed of it; They are often formulated in confusing terms. Consult a lawyer. The lesson is fundamental: competition bans are difficult to enforce. Any company wishing to be able to deter an employee from participating in a competitive activity after the end of the employment relationship should do so by means of a written document drawn up with due regard to the restrictions imposed by the legislation in force. Seriously, the employer could take action against you and make you liable for cash damages, attorneys` fees, and court costs if the complaint is lost. Your employer could also get a court injunction telling you to stop competing immediately.
In this case, the injunction could effectively prohibit you from competing with the employer for longer than your original agreement. And the worst time to learn that your employer is serious about your non-compete clause is after investing time and money in starting a business. In the event of a sale of a business, former owners are often prevented from starting a new business in a geographical area that competes with the business they have just sold for a certain period of time, allowing the sold business to survive without competition from those who have information about the strengths and weaknesses of the business. There is usually a separately negotiated payment for the non-compete rules contained in a sales contract, and often the sold business retains the former owners as consultants during the non-compete period. Courts are more inclined to impose this type of non-compete clause, unlike those in employment contracts, because the parties have received something valuable – a stake in the property, proceeds from a sale or financing – that goes ahead of employment. The conduct which the agreement is intended to prevent must not be contrary to the public interest. In general, public order favours an employee`s ability to move from one job to another without restriction. Only an agreement narrowly designed to protect a legitimate commercial interest is part of public policy.
Before signing a non-competition clause, have it checked by a competent lawyer. For more information or to draft or verify your non-competition clause, please contact our office for a free consultation. Non-competition or non-competition clauses are contracts that contain a restrictive agreement in which a worker promises not to oppose his employer for a certain period of time. . . .