Can a non-compete agreement be too strict?

On Behalf of | Sep 15, 2021 | Employment Law |

It is no secret that non-compete agreements are written to favor the needs of the business over the best interests of the former employee. Organizations will often use vague language, unclear wording or restrictive provisions to protect their trade secrets, competitive edge and intellectual property. Many organizations, however, create these contracts to be too restrictive, often leaving them legally unenforceable.

A former employee could challenge a non-compete agreement based on several factors, including:

  • Geographic factors: Most employers will include geographic restrictions in a non-compete agreement that prevent the former employee from working somewhere in close proximity to the original organization. These restrictions, however, must be reasonable and not make it too difficult for the worker to find gainful employment in his or her region.
  • Time factors: The longer the non-compete clause seeks to limit the employee’s ability to work in his or her field, the more likely the agreement is unenforceable. Most businesses write agreements with a temporal restriction of two years, but this can vary from company to company.
  • Vague language: While an employer might attempt to rely on unclear language to broaden the scope of the non-compete agreement, this would likely lead to the court finding the contract invalid. A non-compete agreement, as all restrictive covenants, must use clear definitions and precise wording regarding all factors. The employer cannot use vague assumptions regarding industries and general notions about experience to hedge the contract.

A non-compete agreement is a type of restrictive covenant like a nondisclosure or non-recruitment contract. Companies draft these documents to protect the business from employees – current or former – from sharing sensitive information to competing organizations. Unfortunately, in their haste to draft a strong document, a business might create a restrictive covenant that is too restrictive. Individuals can challenge the enforceability of a non-compete agreement based on numerous factors.

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