Armstrong & Associates Employment Law Firm

What is a “reasonable” non-compete agreement?

If you are seeking employment, it is not uncommon for a non-compete agreement to be part of the conditions you must agree to. Typically, if an employer wants you to sign a non-compete agreement, they will stipulate it as a condition of employment.

However, just because a non-compete agreement exists does not mean that the courts will choose to enforce it. According to FindLaw, a non-compete agreement must be reasonable in scope, time and geography.

Reasonable in scope and time

No employer can swear you to secrecy for the rest of your life. This would not be reasonable in terms of scope or time. What the courts think is “reasonable” in this metric will depend on the industry itself. However, it is most common for non-compete agreements to have a timeframe of between six months and two years after employment. If the non-compete agreement is longer than this, it is likely that the courts will not enforce it.

Reasonable in geography

Usually, the thrust of non-compete agreements is to prevent competition from popping up in the area from former employees. So if you work for a company that sells widgets, a non-compete agreement will prevent you from working at your original company, and then quitting and opening a widget factory next door.

Again, what the courts will see as “reasonable” depends on the business. However, it is unlikely that the courts will prevent you from opening a widget factory where the original widget maker does not do business.

Understanding the “reasonableness” of non-compete agreements is key to understanding how the courts will enforce them.


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