Chicago Non-Compete Agreements Attorney
There are many aspects to handling non-compete agreements. Below are a number of examples of issues that often arise in non-compete agreements, as well as the legal standards that are often used in evaluating the reasonableness of the agreement.
Companies often invest significant money into building a client base or perfecting their processes or inventions. It is critical that these things be kept confidential and protected. The value of this information is in part created by its confidentiality.. Employees in sales or manufacturing are often exposed to important secrets, such as customer lists and trade secrets. To protect this information, an employee may be required to sign what is known as a non-compete agreement. The critical concern in non-competes is reaching the appropriate balance that protects the company, but not preventing the employee from working.
Valid V. Invalid Non-Compete Agreements
Non-compete agreements are treated differently from regular contracts. Unlike most employment contracts, the non-compete agreement has the effect of inhibiting commerce. Public policy favors people having jobs and being productive. As a result of this, a non-compete agreement has to be properly limited in what it restricts. Typically this requires that it be limited geographically, limited by industry, and cannot be for too long. It is also important that is designed to protect a legitimate interest of the company.
A non-compete agreement which prohibits someone from working anywhere in the world is far less as likely to be valid than an agreement that prohibits someone from working within 10 miles of the former employer’s business. However, this will depend on the kind of work that is involved. For example, a Salon’s interest in keeping a stylist from competing across the street may be legitimate, but if the non-compete agreement prohibited the stylist from competing anywhere in the state, it becomes far less reasonable.
Non-compete agreements must also be for a limited time. So it is more likely reasonable to prevent a hairstylist from working across the street for a year, than it is for three years. While a year may legitimately protect a customer from leaving a salon, it is unlikely that keeping the hairstylist out of work for three years does little to help the business, but may seriously harm the hairstylist.
In the end, to be valid, a non-compete agreement must be tailored to meet the specific needs of the employer, and will be balanced against the interests of the employee. In the event that you are preparing a non-compete agreement, it is best to seek the help of an experienced non-compete agreement attorney to draft a valid and reasonable agreement. If you are dealing with a non-compete agreement as an employee, there are a variety of ways to counter one.
Problems From Non-Compete Agreements
Once an employee leaves their company, there are several ways that non-compete agreements may come up.
There are typically three types of situations that non-compete attorneys may face when dealing with non-compete agreements.
- A non-compete agreement may need to be negotiated with the former employer or employee.
- A former employer may file a claim against a former employee alleging that the non-compete agreement is or has been violated.
- A former employee may file a case against the employer in order to have the non-compete agreement declared invalid by a court.
The first step necessary in addressing a dispute between a former employee and employer is to attempt to negotiate a compromise. What is it that the former employer really needs to protect? Is the employee really looking for work that will hurt the former employer? Can the work that the employee is taking be limited within the new company, so as to satisfy the employer? As non-compete agreement attorneys, we work to create an agreement that saves both parties the cost and trouble of a court battle. Often times, an accommodation can be made, so long as the employer and employee are being reasonable.
If an employee takes a new employment position in which the former employer believes is in violation of the non-compete agreement, the employer may choose to sue the employee, seeking a court order to prevent the employee from working at the new company. The former employer will be required to show that the employee has in fact taken or threatened to take an action in violation of the non-compete agreement. They will then have to prove to the court that the non-compete agreement is valid and is tailored to protect the employer’s legitimate business interest and is limited in time and geography. At the same time, in order to keep his or her job, the employee must defend their case.
Another possibility is in the event that an employee is unable to find a job. In this situation, the employee may file a claim, asking a court to declare the non-compete agreement is not valid .The law can favor the employee in these cases. If the court enters a “declaratory judgment” and finds that the non-compete agreement is invalid, it may either change the non-compete agreement, or eliminate it altogether.
In any of these situations, you will need the help of a Chicago non-compete attorney. The attorneys at Maduff & Maduff, are experienced in handling all of these types of situations. If you are facing a non-compete agreement, or are in need one, contact us.