When my current employer hired me, I was required to sign a contract with a non-competition clause. I want to leave and work for a competitor in a different part of the country. Can my employer prevent me from doing that?
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A non-compete agreement will sometimes be enforced in a Pennsylvania court, but if you are moving across the country, the agreement may not be enforced in your situation. Whether or not your employer will be able to enforce the non-compete agreement depends on your situation.
The Rules for Enforcement
As with all legal issues, there are circumstances where your non-compete agreement will be enforced and some where it will not be enforced. Generally, in order to be enforced, a non-compete agreement has to be narrowly tailored to prevent harm coming to the employer based on you going to work for a competitor. It cannot interfere with your right to make a living. If you are moving across the country, then it is likely that your new company isn't going to be a direct competitor of your old, so the non-compete clause generally should not prevent you from taking the new job. Of course, if the industry is one where the competition is at a national level, and if you have a lot of company trade secrets, then the court may be more likely to prevent you from going to work with a competitor.
In addition to geographic location, a number of other things are considered:
- There needs to be sufficient consideration for a non-compete clause to be enforceable. Often, an employer will ask for an agreement that includes a non-compete agreement as a requirement for being hired, so the consideration is the job itself. For current employees, adequate consideration to sign a non-compete clause could be a bonus, pay raise, a severance package, or other benefits. Simply keeping a job would not be considered sufficient consideration for current employees.
- The non-compete agreement must be tailored to the specific employee and not to a job title in general. It is also wise to draw up a new agreement every time the employee's job changes, such as if he gets a promotion or increase in responsibilities.
The bottom line is, these non-compete agreements are meant to protect an employer from unfair competition, but if the employer uses it to gain an unfair advantage or to try and eliminate all competition, then it may not be enforced. The agreement also needs to reasonable in the amount of time and its scope. The scope could be limited to certain customers or a certain region, but should not be nationwide.
If you are concerned about whether or not your non-compete agreement will be enforced, it is in your best interests to consult with a lawyer for help.