3 Things To Consider Before Signing A Noncompete Agreement

While many people typically think of noncompete agreements as only being necessary for companies with trade secrets or high-profile client lists, an increasing number of businesses and companies are including noncompete agreements in their hiring process. Although this can be extremely beneficial from an employer’s perspective, this same thing isn’t always the case for the employees. So if you are presented with a noncompete agreement when searching for a new position, here are three things to consider before signing that may affect both your current and future career.

Decide If The Agreement is Reasonable or Not

Generally, noncompete agreements are legally binding for however long the terms of the agreement state. However, Nolo.com shares that a noncompete agreement can be found unreasonable for any number of reasons. Some of these reasons include extending for too long after your employment, being too broad in its parameters, including too much of a geographical area and a few other things. If the agreement you’ve signed is found to be unreasonable, it can be deemed void and give you all your freedoms back. For this reason, it’s vital that you either sign a reasonable agreement in the first place or seek legal advice if you feel the agreement is unreasonable.

 

You Can Negotiate

Just like every other aspect of a working agreement, you can negotiate with the prospective employer about a noncompete agreement prior to accepting it. In fact, Jessica Hullinger, a contributor to FastCompany.com, writes that lawyer Michelle Grant recommends to all her clients that they attempt to negotiate any noncompete agreement. This will require you to read the entire agreement very well and present your idea for fair conditions before signing. While this can be intimidating during the interview process, taking this step could save your career in the future.

 

Consider What You’ll Do If and When You Leave

In a tough job market, it can feel like you’ll do almost anything to land a job. But if you make a poor decision about signing a noncompete agreement out of desperation, you may live to regret it for years and years afterward. For this reason, Paul W. Barada, a contributor to Monster.com, suggests for employees to consider what they’ll do in various situations that result in them leaving their company. If you’re laid off or fired, your employer may be willing to change the terms of your agreement so it’s easier for you to find a job in your same field. But if you’re leaving for a competing company or to start your own similar business, the chances of you being able to get out of your agreement are a lot slimmer.

While a noncompete agreement isn’t necessarily a sign that you should run the other way from a company, it can have a big impact on your career and subsequent life. Use the tips mentioned above to make the best possible decision for yourself the next time you’re presented with a noncompete agreement.

Author: Kar

Dr. Kar is in the Information Systems & Management area in one of the top QS Ranked universities of Asia/world. He has extensive experience in teaching, training, consultancy and research in Indian Institutes. He has published over 75 high impact research papers with hundreds of citations as per Google Scholar. He has also authored/edited a number of books. He is the Editor and Founder of Business Fundas.
Note: The articles authored in this blog are his personal views and does not reflect that of his affiliations.