Mistakes to Avoid when Drafting a Noncompete Agreement

Many employers request that their employees sign non-compete agreements when they leave for new positions. Many workers sign these documents and assume their old company cannot legally enforce the rules. While many employees don’t fight against non-compete agreements, others do. In the state of Colorado, breaking this contract might have disastrous results.

In the case of a non-compete agreement, the usual scenario is that an employer sends a letter to a former employee and their new employer, threatening to sue both. In turn, the employee gets terminated from the original position in spite of telling the employer about the non-compete agreement. Employees in this situation who fight the former employer generally win their lawsuit and receive compensation for lost wages, attorney’s fees, and other damages.

When is a Non-Compete Invalid for Employers?

There are certain ways an employee can prevail over a non-compete agreement. They include the following five mistakes:

Employer breach of contract – Provisions in non-compete agreements usually explain things like pay, insurance, and other employment conditions. If the employer breaches anything stated in the contract, the employee does not have to abide by the non-compete agreement. The employer should always ensure that everything in the deal has been met, according to what they promised to the employee after they are no longer working for them.

No legitimate interest to enforce – Some employers tend to overreach business interests, which is a mistake they frequently make. For example, there is no legitimate reason to make a lower level employee, such as a receptionist, sign a non-compete clause. On the other hand, a computer software engineer may legitimately be asked to agree to one. Legitimate business interests such as trade secrets, significant relationships with clients, or confidential and valuable business information are reasons to enforce a non-compete contract.

The agreement overreaches – Usually, non-compete clauses are valid for under six months but considered invalid once the two-year mark has come and gone. Generally, enforcing the agreement for up to two years is reasonable.

Information is already readily available to the public – If the “confidential” information is already readily available to the public, the contract would not be viable. For example, many employers want to prevent their former workers spilling trade secrets. If it’s no longer a “secret” and reported in public news, the former employee is absolved.

Public health or safety is at stake – This rule applies to doctors and others in the healthcare or scientific fields. If an employee is only one of very few who can perform a specific procedure that is highly sought after and necessary for public health or safety, the employer would not be able to enforce a non-compete contract.

Before signing anything, it’s a good idea to have an experienced attorney take a look at the contract. While most of these are simple to follow and legitimate, you don’t want to end up with a non-compete agreement that stops you from working entirely.

Experienced Non-Compete Attorney in Denver

If you need help with a non-compete agreement, call Davidovich Law Firm. We have over 55 years of experience helping individuals with contracts, non-compete agreements, and a variety of employment cases. Attorney Nathan Davidovich has more than 55 years of experience and holds a 2015 Clients’ Choice Award for outstanding work. Additionally, Mr. Davidovich has a 100% Client Recommended Review on Martindale.com, the premier rating service for attorneys. Call (303) 825-5529 or schedule a consultation with Mr. Davidovich today.