A non-compete agreement, also referred to as a “non-solicitation agreement”, is a contract that is usually made between an employer and an employee to ensure that any information learned about the business is not used against the employer in the future. Therefore the employee will be prohibited, depending on what’s written in the agreement, from working for competitors, starting their own business (in the same industry), or working in a specified area.

Most States have regulations against non-compete agreements such as California that has outright banned them. Nevertheless, it’s a good idea to have a non-compete especially if the individual will have some type of ownership in the business.

By State

Table of Contents

What is a Non-Compete?

A non-compete is

Non-Compete Clause (Sample)

Non-Compete. The Employee shall be prohibited from rendering services for themselves or any organization which engages directly or indirectly in any business which, in the sole judgment of the Employer, is or becomes competitive with the Company while employed and during the ____ months after the Emtermination.

Non-Solicitation Clause (Sample)

Non-Solicitation. During the period of employment and the following ____ months after the Employee’s termination, the Employee shall not, without the Employer’s prior written consent, directly or indirectly; (i) solicit or encourage any person to leave the employment or other service of the Employer or its affiliates; or (ii) hire, on behalf of the Employee or any other person or entity, any person who has left the Employer within the one (1) year period following the termination of that person’s employment with the Employer or its affiliates. The Employee agrees to not, whether for its own benefit or for the benefit of someone else, intentionally interfere with the relationship of the Employer or its affiliates with, or endeavor to entice away from the Employer or its affiliates, any person who during the term of the Agreement is, or was a tenant, co-investor, co-developer, joint venturer or other customer of the Employer or its affiliates.

How to Get Out of a Non-Compete (4 Options)

Getting out of a non-compete is not the easiest thing for an employee especially in the tech industry. An individual will commonly have to resort to buying out themselves from the non-compete or deciding to compete in another area outside the non-compete’s jurisdiction.

Option 1 – Check State Laws

Many employers will have an individual sign a non-compete whether or not it is legal in the State. An employer benefits from having the employee feel as though they are restricted as their employer may still bring them to court knowing the employee will not have the funds to defend themselves.

Therefore, checking the laws in the State (View State Laws) to verify if the non-compete agreement that was signed is valid should be the first (1st) step.

Option 2 – Request a Release

Using the Non-Compete Release Form a past employee or independent contractor may use to free themselves of a non-compete agreement. The former employer, depending on how valuable the information that was transferred, may be hesitant to sign such an agreement without compensation.

Option 3 – Leave the Trade Area

Most non-compete agreements are only for a specific trade area such as a specific distance (radius of a location), City, County, State, or Nationwide. If the employee is able to re-locate and practice their trade outside the non-compete trade or market area, that could be the best option.

Option 4 – Violate the Contract

This is not always recommended but if the employer is unreasonable to allow the individual to break the non-compete, he or she may have to violate the contract. This means going out and performing the work that they are not supposed to be performing and risking themselves, along with their employer, of legal liability. This should only be an option if the individual feels as though the employer is small enough where they would not want to fight a legal battle against the person violating the contract.

Enforcing a Non-Compete

Enforcing a non-compete requires legal counsel and the ability to show the other party that a lawsuit will be filed unless they stop immediately what they are doing. Most non-compete violations never go to court and a resolution almost always occurs after the violating party is shown the legal and financial ramifications if they do not comply.

Step 1 – Send a Cease and Desist Letter

A cease and desist is the first step

Step 2 – Speak with Legal Counsel

Step 3 – Begin Court Proceedings

State Laws

  • AL – § 8-1-190
  • AK – No Statute.
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How to Write

Download: Adobe PDF or Microsoft Word (.docx)

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