A non-compete clause restricts your ability to work for competitors or start a competing business after leaving a company. These clauses can significantly impact your career mobility and earning potential.
“Employee agrees that for a period of two (2) years following termination of employment, Employee shall not, directly or indirectly, engage in any business or employment that competes with the Company's business within a 50-mile radius of any Company location.”
This clause prevents you from working for any competitor or starting a similar business for 2 years after you leave, within 50 miles of where the company operates. This could severely limit your job options if the company has multiple locations.
Overly broad geographic restrictions that limit job opportunities
Excessive time periods (more than 1-2 years is often unenforceable)
Vague definitions of 'competing business' that could apply to many industries
No compensation during the restricted period
Applies even if you're terminated without cause
Possibly. Non-competes may be unenforceable if they're overly broad in scope, duration, or geography. Some states like California ban them entirely. Consult an attorney to review whether your specific agreement would hold up in court.
Common factors that make non-competes unenforceable include: excessive duration (over 2 years), overly broad geographic scope, vague definition of competitors, lack of legitimate business interest to protect, and no consideration (you didn't receive anything for signing it).
It depends on the contract and your state. Some agreements specify they don't apply if you're terminated without cause. Many states view enforcement less favorably when the employee didn't choose to leave. Check your specific agreement and state law.
Possibly, depending on how 'competitor' is defined. If the client isn't in a competing business, the non-compete may not apply. However, you should also check for non-solicitation clauses that may restrict working with specific clients regardless of competition.
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A non-solicitation clause restricts your ability to recruit employees or solicit clients/customers from a company after your relationship ends. These can impact your networking and business development.
A confidentiality clause (or NDA - Non-Disclosure Agreement) protects sensitive business information from being shared with third parties. These clauses are essential but can be overly broad or perpetual.
An intellectual property clause determines who owns the work, inventions, and creative output produced during a business relationship. These clauses can have lasting impacts on your ability to use your own work.