Non-Compete Clauses: When They Can Come Back to Haunt You Years Later

There has been a recent increase of non-compete clauses going hand-in-hand with job offers, even offers for minimum wage and blue collar jobs. We tend to think that the use of non-compete clauses is meant for more professional occupations, such as those in the technical industry, trademark and patent issues, and those high up the management chain. However, this has not proven to be true.

Unfortunately, many employees may not even realize the ramifications of signing a non-compete agreement. Because of the (still fairly high) unemployment rate, many are taking whatever job may come their way, even if that means a very limiting non-compete clause associated with it. In the past several months, I have encountered a few employees that have signed such a clause, wanting to get out of it so they can open up their own shop or work for a competitor.

A few things to know regarding non-competes: an employee should be asked to sign this in exchange for an offer of employment (at the beginning of the employment), or the employee should have been provided some type of consideration (exchange) for signing the agreement if it is presented after the employee has started working, for instance, bonus, benefit, or perk. When looking at the non-compete clause, an employee should always know what the actual restrictions are—does the clause prohibit you from working for any other job in a similar field or position? Does it limit the clause to a geographical scope? Did it narrow down on time frame? All these are very important considerations—the last thing you want to do is be stuck in a job you dislike but can’t leave because of this clause. Better opportunities may come your way and you probably do not want to be bounded by a ridiculous and overly broad non-compete agreement.

I like to advise all employees to at least have an attorney look at the non-compete before signing it. Of course, if you already signed one, it is not the end of the world, you may be able to still argue that the non-compete is not binding for various reasons, including no geographical or time limitation.

Feel free to contact Attorney Ada K. Wong at info@akwlawpllc.com or (425) 954-3512 if you have any questions about a non-compete clause you are asked to sign or have already signed.

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