Non Compete Agreement upon Resignation

When an employee resigns from a company, it`s important for both parties to have clarity about any agreements that were made during the course of the employment. Among these agreements is the non-compete agreement, which is a legal document that restricts the former employee from working for a competitor or starting a competing business for a specified period after leaving the company.

Non-compete agreements are common in many industries, especially those that rely heavily on trade secrets or intellectual property. The purpose of these agreements is to protect the employer`s interests by preventing the former employee from using their knowledge, skills, and connections to benefit a competitor or start a competing business.

When a non-compete agreement is included in an employment contract, the terms of the agreement should be clear and specific. The length of time that the non-compete will be in effect should be reasonable, usually ranging from six months to two years. The geographic scope of the non-compete should also be reasonable. For example, if the company operates in one state, it would not be reasonable to restrict the former employee from working for a competitor in another state.

If a non-compete agreement is not included in the employment contract, the company may still require the former employee to sign a separate agreement upon resignation. It`s important for the former employee to carefully review the terms of the agreement and seek legal advice if necessary.

In some cases, non-compete agreements may be unenforceable. For example, if the terms of the agreement are too broad or unreasonable, a court may find the agreement to be unenforceable. Additionally, some states have laws that restrict the use of non-compete agreements, especially for low-wage workers.

Overall, non-compete agreements are an important part of employment contracts and should be carefully reviewed by both parties upon resignation. By understanding the terms of the agreement and ensuring that they are reasonable and enforceable, both the former employee and the company can protect their interests and move forward with their respective businesses.