Non Compete Agreement:
How Does A Non Compete Clause Affect You?

A non compete agreement or (no compete clause) is often used by employers to protect themselves against their staff leaving their company to join another company (ie. a competitor).

The fear is that when leaving the company, an employee could take assets with them to their new employer that would hurt their current employer.

Imagine for example you sell plumbing equipment and have built up a significant customer base while working there and decide to leave your employer to join a rival plumbing supplier in a similar sales role. If you took all of your business from your current employer to your new company, it would certainly hurt your current employer very badly.

As a consequence, companies typically try to protect themselves from such things happening and a non compete agreement is one way of doing so.

Here are some examples of non compete agreements that I’ve seen included in job offers:

• A non compete agreement that prevents the person from working for a direct competitor for a certain period of time ie. one year.
• A non compete agreement that prevents or limits the geographic area in which the person works for a competitor.
• A non compete agreement that limits the industry or trade that a person can work in for a period of time ie. one year.

What should you do when faced with a job offer that contains a non compete agreement?

First and foremost, a non compete agreement is a legal clause so your best bet is to consult a labor lawyer or someone else who is qualified to determine the validity of the clause and whether or not you should be concerned about agreeing to it.

Don’t assume you understand legalese (ie. lawyer language) if you don’t!

If you’re already employed, are considering leaving your employer and are concerned about a non compete agreement that is already in place in your employment contract, you should again consider consulting someone with professional experience in this area before doing anything.

The last thing you want to do is anything that could be construed by your current employer as being a breach of your employment contract with them. Ignorance on your part (ie. “I didn’t know what I was signing”) is not a good excuse.

If in doubt, consult a lawyer.