5 Things to Ask Before Signing a Non-Compete Agreement

Non-competeA non-compete agreement is a contract that restricts an employee from working for a competitor during the employment period and for some time after its conclusion.  It is typically presented to you on your first day of work, in a promotion offer, or alongside a severance package. Non-compete lawsuits have tripled since 2000–a fact that companies claim is only natural in an economy that is based on knowledge more than on manual labor. As a result, non-competes, which were once a policy only for high-level executives, have now stretched further down the corporate ladder to include 16-18% of all American workers.

Experts almost universally agree that non-competes have had a negative economic impact on states that allow them.  They have led to lower wages and less innovation, entrepreneurship, and employment. Robert Ottinger, an employment lawyer, says that “you’re trapped” once you’ve signed a non-compete because your employer has taken away your greatest asset–years of acquired experience and skills.  Many have compared these agreements to economic slavery. 

Ask the Right Questions About your Non-Compete

While non-compete agreements could be valuable if they elicited employee-employer negotiations for more benefits and higher pay, most people don’t think twice before signing them.  In fact, only 1 in 10 workers seek legal counsel to review their contracts. Due to the uncertainty, complexity, and gravity of these contracts, you should ask your employer the following five questions before signing any non-compete agreement. 

  1. Ask who drafted the non-compete agreement.  Your non-compete could be a one-size-fits-all internet download or the product of a lawyer’s careful preparation.  If you’ve been presented with a standard online non-compete contract, discuss each stipulation with your employer to tailor it to your specific interests. 
  2. Ask where and to which companies the non-compete applies.  It’s in your best interest to limit the non-compete’s geographic restriction as much as possible.  It’s also important for your employer to be very specific about the companies you can and cannot work for.
  3. Ask what your company’s real concerns are.  Sometimes pinpointing your employer’s primary worries can help you narrow the scope of an agreement. 
  4. Ask about the duration of the non-compete agreement. It’s beneficial for you to negotiate a shorter non-compete period or try to limit the length of the non-compete to the weeks of severance your employer would give you in the event of termination.  
  5. Ask if you can receive a copy of the agreement in advance so that you can consult with legal counsel before signing it.  Legal consultations can be low-cost and even save you money that would be lost if your employer sued you for breach of contract. 

Seek Legal Assistance 

If you have been presented with a non-compete agreement, the Law Office of Christopher Q. Davis, located in New York City, can help ensure that you are getting a fair deal. Contact us today at (646) 430-7930 to schedule a free case evaluation and receive experienced legal counsel.