What Problems Could Arise From The Use Of Non-Compete Agreements

14. If the non-compete clause I have signed is applied, it means that I cannot earn a living at all. What am I supposed to do? Probably. Your employer may also claim “liquidated damages” if these are defined in the non-compete agreement. The liquidation of damages is a fixed amount that the employer and the worker accept in damages if the employee violates the agreement not to compete. However, not all liquidated damages are enforceable by law. It also depends on the facts of each and the law of each state. An employer who wishes a non-compete agreement may, in some cases, pay a “consideration”: additional compensation in exchange for the worker or seller who accepts this provision or another non-monetary benefit, such as. B a change in obligations or those responsible for the work. However, the need to do so depends on your state`s law. As a general rule, your employer does not have to give you additional financial compensation, but this cannot have any consequences if the employer tries to enforce the agreement. Some states require the payment of counterparties, while others consider it simply an important part of the court review to decide the application of the agreement. In a recent decision, the trial court stated that an employer may be allowed to unilaterally terminate a non-compete contract after the end of the employment contract, even if there is no contractual clause to do so.

Unilateral dismissal (i.e. dismissal) by an employer may be acceptable, especially if there is a long time between the conclusion of the contract and the termination of the employment contract. Many practitioners challenged this decision, which the Tribunal drew from the principle of contractual freedom. The case has yet to go to the Supreme Court. It will be interesting to see if the Supreme Court shares the view of the Trial Court, which could lead to a more employer-friendly approach. #3: They can help you keep your staff. When a non-compete agreement is reached, the likelihood of workers leaving the labour market may be lower. You can even enter into the contract a depreciation clause that requires your employees to reimburse your training costs if they leave before a prescribed period expires. As an employer, you may find these tools useful to protect the investment you have invested in your employees. Each state has its own standards regarding the validity of non-competition clauses.

For specific information on your state`s non-compete obligations and pending laws, please contact a lawyer in your state. At the federal level, the White House released a 2016 report on non-competitive employment contracts, which says they can “impose significant costs on workers, consumers and the economy in general. On the other hand, the employer can take legal action to obtain what is called an “injunction” or injunction to prevent you from violating your contract. Since a violation of a no-competition agreement can cause direct harm to the employer, the Tribunal will often apply expedited procedures in these cases.