Non-compete obligations generally impose restrictions that prevent workers from holding employment or at least providing services to competitors for a certain period of time and/or in a particular geographical area. These types of clauses are usually found in or are ancillary to employment contracts or as part of a contract with a service provider. In addition, non-compete obligations may be part of a sale or business transaction and may be used to prevent the seller of a company from competing with the buyer for a period after the sale is concluded. Non-compete obligations can be used to protect valuable corporate assets such as trade secrets, intellectual property, proprietary information and goodwill. In particular, non-compete obligations are an integral part of employees who have information which, if disclosed, could jeopardise the activity of an undertaking either after the sale or after the end of the employment relationship. Related provisions, such as non-solicitation clauses. B, are used in conjunction with a non-compete clause or as an alternative provision to prevent an employee from recruiting clients or employees of a former employer for a certain period of time. According to recent investigations highlighted by FTC Commissioner Rebecca Kelly Slaughter at the FTC workshop, it is estimated that 16 to 18 percent of workers in the United States are subject to a non-compete clause. In addition, nearly 14% of workers earning less than $40,000 a year are non-competing parties. review the current status of non-compete obligations and the legal analysis of their enforceability; The following list will tell you whether the obligations or non-compete clauses are enforceable for any, some, or all types of employment relationships governed by the laws of your state. If certain professions are listed, only those professions are exempt from being bound by non-compete obligations in that State, and non-compete obligations are likely to continue to apply to all other professions not listed. Note that even if the non-compete obligations are unenforceable in your state or against certain professionals you employ, your state will likely continue to allow you to enter into a non-disclosure agreement to prevent employees from disclosing or using confidential information and trade secrets.

“Understanding the extent of an employer`s current non-compete obligations will allow the employer to make the necessary adjustments if and when the FTC takes action,” Elkins advised. Non-compete obligations indicate the geographic scope, duration and type of activity in which a former employee is not allowed to participate. For example, a car salesperson may have a non-competitive radius of 50 miles so as not to steal customers from their former dealership. On the other hand, a television journalist may be prohibited from working for other local television stations for a period after termination; Delays can range from a few months to two years. Are non-compete obligations enforceable? I mentioned that a lawyer will say “it depends,” and that`s the boring truth about non-compete obligations. Here are some suggestions. Christopher Ghazarian, general counsel for web hosting company DreamHost, said: “The most important question a business owner can ask is: Why do we need a non-compete clause in the first place?” Many States attempt to restrict the applicability of non-compete obligations because they are considered excessively severe restrictions of competition. These agreements can make it almost impossible for employees to find more work after being laid off. Non-compete obligations often prevent workers from working in the same sector as their previous companies. If they have spent their entire careers developing their expertise and skills in this particular industry, these employees are effectively excluded from looking for a comparable job with a similar salary.

Is the non-compete clause formulated narrowly enough to reflect only your company`s legitimate business interests (e.B. to protect the prevention of solicitation or employees or the restriction of the disclosure and use of trade secrets and confidential information) for a reasonable period of time? If you work in the Commonwealth of Virginia and have signed a contract with your employer that includes a non-compete clause, there may be legal consequences if you violate that agreement. You need to know how this may affect you in case you are fired or decide to change jobs. The law firm Erlich can help you assess and navigate these situations, whether you`re working for a defense contractor in Fairfax, a nonprofit in Alexandria, or a tech startup in Tyson`s Corner. Ghazarian: “Employees can generally negotiate stronger compensation due to the restrictions imposed by non-compete obligations. It`s possible that a ban on non-competition creates incentives for employees, especially if an employer thinks their new executive recruit can pack up and leave within months of learning valuable secrets from their current company. “When it comes to restricting competition, each state has a slightly different approach, and non-compete obligations are no exception.