Professionals often have to sign noncompete agreements when accepting new positions or promotions. Employers want to protect their organization from unfair competition. They require that workers sign contracts with terms that limit their ability to start a competing business or take a position with a local competitor after exiting their current position.
Noncompete agreements protect employers from unfair competition, but they may also impose a degree of hardship on the professional who signed the contract. How long does an executive, physician or salesperson bound by a noncompete agreement have to wait to take a job with a competing business or start their own company?
Each contract is unique
The exact terms included in a non-compete agreement are different from one contract to the next. Many employers create customized documents to optimize organizational protection. The terms included in the agreement need to be specific instead of overly broad.
That generally means that the agreement is only enforceable for a certain amount of time. Most noncompete agreements remain in effect for anywhere from six months to two years. Occasionally, they may last longer than two years.
Noncompete agreements that remain in effect for unusually long periods may impose an unfair burden on the professional. Overly broad noncompetes may not hold up under scrutiny during enforcement efforts in the civil courts.
Employees concerned about their future economic activities may need to review the contract they previously signed to determine if they are at risk of their former employer enforcing the included restrictive covenants. Understanding the rules that limit noncompete agreements can help professionals pursue opportunities after leaving a job that involved a contract with restrictive covenants.