When you start a new job or prepare to leave your current one, you may encounter a legal document called a noncompete agreement. This document is meant to prohibit an employee from directly or indirectly competing with their organization for a specific time after ending their working relationship with the company.
A noncompete agreement is also called a noncompetition agreement. You can also see it as a noncompete clause as part of an employment agreement.
A noncompete agreement lawyer helps employers and employees determine what is fair, legal, and enforceable in their agreements. They draft legal documents as well as review them. They can also help employees void invalid noncompete agreements and negotiate the terms of an agreement with an employer.
What do Noncompete Agreement Lawyers do?
Noncompete agreement lawyers help businesses and employees determine the fairest arrangement for their professional relationships.
As a business, you want to prevent employees from sharing intellectual trade secrets and engaging with competitors after employment ends. The easiest way to legally enforce this is through noncompete clauses in an employment contract.
Likewise, you can have the employee sign a separate noncompetition agreement and attach it as an addendum to their employment contract. Various employment contracts cover a company's limits, liabilities, and restrictions.
A noncompete agreement lawyer can help your organization draft the most effective clause or contract to protect its competitive advantage.
For employees, a noncompete agreement lawyer can review employment documents before signing to ensure that they’re legally fair. As with any legally binding contract, you may want to have a lawyer review employment contracts if they contain clauses you’re unsure of or if the terms do not align with what was offered initially.
Here is an article about the enforceability of non-competition agreements throughout the United States.
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Can you negotiate a Noncompete Agreement?
You have the right to negotiate any contract before signing. However, it can be considered unenforceable if you feel you have no choice but to agree to a contract. Contracts are invalid if signed under coercion or duress, so being refused the right to negotiate automatically makes an agreement unethical and unenforceable by law.
When it comes to employment law, a noncompete agreement can be written for a variety of situations. It may include terms and conditions in which an employer agrees not to engage in any business activity with a director competitor. If given to an employee as part of a work contract, they may have to agree not to work for a direct competitor for a certain period of time.
While the right to negotiate cannot be taken away, that does not mean the other party must agree to your terms. They have the right to decline your negotiation offer. From that point, you may either settle on a compromise or terminate your relationship.
A noncompete agreement lawyer can aid the negotiation process. They can help you determine the most appropriate and fair terms of a non-competition agreement, as well as what to ask for in your employment contract.
Negotiable terms in a noncompete agreement include:
- The right to start your own business after employment ends
- The specific duration of time you must avoid looking for work with a competitor after leaving your current organization.
Suppose your current noncompete clause prohibits you from seeking employment with competitors for 1 year. You could negotiate to reduce the time limit to 6 months. This could ensure you can have a job opportunity near you.
Here is an article outlining different parts of a non-compete agreement you may negotiate.
Key Terms in a Noncompete Agreement
Every noncompete agreement has key elements that outline the scope of the agreement and protect a business’s competitive advantage. By learning the key terms of a non-competition agreement, you can better prepare to review one you’re offered and negotiate terms.
Here are the most essential parts of a noncompete agreement you should know.
- Geographic region. It wouldn’t be fair or enforceable for an employer to prevent someone from seeking employment anywhere in the United States. However, they may prohibit working with competitors in the same state for a period of time. In other cases, specific counties or businesses within a distance from the organization will be banned.
- Duration. The average non-competition agreement lasts 2 to 5 years. However, timing can vary by industry and the nature of the profession. For example, those working in government positions or jobs with access to classified or highly confidential information may have longer durations. A noncompete lawyer can help you determine if the agreement is fair according to the type of employment and timing indicated.
- Competition. Some agreements are so precise that they will specify exactly which competitors an employee is barred from working with after they leave their job. For example, a real estate agency may write the names of specific agencies that an employee cannot work for after termination or resignation.
- Compensation. The agreement should include what compensation the employee owes the company if they violate their agreement. This is a common provision that ensures the organization is compensated for any potential losses they face by the employee working for their competitor.
- Trade secrets. The agreement should include a comprehensive breakdown of any trade secrets the employee has acquired during their employment and any penalties they face for sharing these secrets with a future employer.
As far as how enforceable noncompete agreements are, it varies by state. The best way to determine whether your agreement is fair and enforceable is to consult with an attorney.
Here is an article exploring how to protect trade secrets with non-competition agreements.
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How Much Does a Lawyer for a Noncompete Agreement Cost?
You'll likely spend $200 to $350 an hour for a lawyer in your state. Some lawyers require retainers up front, which secures their services for the future. A retainer costs between $1,000 to $5,000. This depends on the scope of the services you require and the type of lawyer you are working with.
According to ContractsCounsel’s data, the flat rate fee for a noncompete agreement is $439.94.
Here is an article with a full guide on non-competition agreement costs.
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