Know the non-compete agreements that protect your business, or limit your career.
Non-compete agreements restrict workers. They limit where, how, or for whom employees and independent contractors can work during or after their employment. Non-competes can be a critical tool for employers to protect their business and their staff. They can also can have a significant impact on someone’s career.
How we help employers
We work with companies to draft non-competes for new employment agreements, stand-alone agreements, and separation and release agreements. We smartly tailor the restrictions to each company’s needs, decreasing the risk that such important protections will be held unenforceable in arbitration or litigation.
How we help employees and independent contractors
We work with employees and independent contractors to review and negotiate the terms of any proposed non-compete agreement, which may be presented in employment and independent contractor agreements, stand-alone agreements, or separation and release agreements. For clients who are already bound by a non-compete, we analyze those existing restrictions for vulnerabilities under the law, so we can advise employees and contractors on their options moving forward.
Employees and contractors often challenge non-compete agreements in arbitration or litigation. We advise clients on their likelihood of success, and represent clients if they need to initiate or defend such challenges.
Non-competes, by definition, limit competition. So, they are usually “disfavored” by courts. While every state has its own test for whether a non-compete is enforceable, it often comes down to some form of the same question: Is the restriction reasonable?
Courts may approach that question from different angles:
- Is the restriction narrowly tailored to protect a legitimate business interest?
- Does it apply to specific clients, or try to broadly prevent competition?
- Does the restriction last too long, or cover too large a geographic area?
- Does it unfairly prevent the employee from earning a living?
Notably, when it comes to low-wage workers, more and more state legislatures are concluding that employers lack a legitimate interest in preventing competition.
For example, Virginia’s new law (effective July 1, 2020), states: “No employer shall enter into, enforce, or threaten to enforce a covenant not to compete with any low-wage employee.” Read more about What Virginia Employers Need to Know About the New Non-Compete Law.
Maryland has enacted a similar ban concerning employees earning (as of this writing) equal to or less than $15 per hour or $31,200 annually.