In this article we discuss how to get out of a non-compete agreement after you signed one. Most people in the United States sign a non-compete agreement as part of their employment contract without reading the agreement or run it by a lawyer first. They believe that a non-compete agreement can be freely broken without consequences and signing one does not impact them whatsoever. However, for the most part this is not true.
Companies in the United States often require their employees to sign restrictive covenant agreements that include non-compete, non-solicitation, and confidentiality clauses. A non-compete agreement usually prohibits a former employee from working for a competitor or with a competitor, while a non-solicitation agreement typically prohibits a former employee from soliciting customers and employees. Most companies ask employees to sign a non-compete agreement at a time when leaving the company is the furthest thing from an employee’s mind and as a result companies do not have any difficulty in getting their employees to sign such an agreement. However, sometimes employees end up regretting later having entered into a non-compete agreement.
Anyone entering into a non-compete agreement should understand that such contract is governed by state laws and should familiarize themselves with the state laws regarding restrictive covenants (restrictions on competition or trade) because the conventional wisdom that non-competes can be freely broken is largely false. In most states, a non-compete agreement is valid and enforceable, even if courts disfavor them. In very few states such as California and Massachusetts enforcement of noncompete agreements is restricted. In other words, non-compete agreements are lawful in most states although their enforceability is decided on a case-by-case basis.
How do you get out of a non-compete agreement without going to court?
Sometimes going to court is the right answer but below we provide a list of points on how to get out of a non-compete agreement:
- The employee has a cause of action against the employer for a wrong committed by the employer. There are situations where you have a valid non-compete agreement and the employer has wronged you for example by wrongfully terminating your employment (termination without cause) or you were part of a mass layoff. When you have a cause of action against your employer for something they did, you can use it to negotiate a waiver of the non-compete agreement with your employer.
- The employer breached the employment contract. A non-compete agreement is only one part of an employer contract; the other is the employer’s responsibilities to you. Check your entire employment contract line-by-line for what was agreed upon in terms of employee compensation, and if any part of their obligations went unfulfilled, your obligation not to compete may be relieved.
- The employee or employer never signed the employment contract or non-compete agreement. Ask the employer for a copy, and see your personnel record if you do not recall signing. If you or the employer did not sign the employment contract or non-compete agreement then you do not have an obligation not to compete with your employer. Without a valid non-compete contract you are free to pursue any opportunities.
- The information the employer is looking to protect is in the public domain. If your employer purchased leads from another company, a chamber of commerce, or another public source, this information cannot be protected under a non-compete agreement.
- The employer acted illegally or dishonestly. If you have a valid non-compete agreement and the employer asked you to act illegally or dishonestly towards customers, business partners and others or the employer themselves engaged in illegal or dishonest acts, then you can use this to negotiate a waiver of the non-compete agreement.
- The employer tricked the employee into signing the contract. If you have a valid non-compete agreement but the employer made verbal promises to get you to sign the non-compete agreement and did not follow through on them, then you can use to negotiate a waiver of the non-compete agreement.
If an employer insists on enforcing a non-compete agreement, contact us or schedule a consultation with your business lawyer in Florida to assist you with how to get out of a noncompete agreement and write a letter to the employer.
Malescu Law P.A. – Business Lawyers