Non-compete agreements can be restrictive and limit your ability to move on with your life and your career. These agreements can potentially impact your career development and ability to make a living. However, there are situations where you can break free from these constraints legally and ethically. In this blog post, we’ll explore six legal loopholes and strategies to help you get out of a non-compete agreement:
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Non-Competitive Activity at New Employer: One of the most straightforward ways to overcome a noncompete is by ensuring that your new role with a different employer is in a non-competitive capacity. If you’re not engaging in activities that directly compete with your former employer’s business, you may be in the clear.
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Former Employer Breached the Agreement: A party who breaches a contract cannot seek to enforce it. So if your former employer has breached any terms of your non-compete agreement, it substantially weakens their position should they try to enforce it. Common breaches include non-payment of wages or substantially changing your role.
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Lack of Legitimate Business Reason for the Non-Compete: Non-compete agreements must serve a legitimate business interest, such as protecting trade secrets or customer relationships. Otherwise, the non-compete is unenforceable. If your former employer’s non-compete lacks a genuine business reason or is over-broad, it may be unenforceable.
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Unenforceable Terms: Non-compete agreements should be reasonable in terms of duration, geographic scope, and activity restrictions. If your non-compete has terms that are excessively restrictive, it may not hold up in court.
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Tricked or Coerced into Signing Under Duress: If you were coerced or tricked into signing the non-compete agreement under duress, it is likely invalid.
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Non-Competition Agreement Was Never Signed: If you can prove that you never signed a non-compete agreement or that it was forged, this is a strong defense.
But perhaps the most important factor when it comes to non-competes is money. Our rule of thumb to evaluate whether or not someone will be sued for breach of a non-compete is to “follow the money.” If you go from Company A to Company B, and Company A does not lose any customers, client share, money as a result, then a lawsuit is very unlikely. On the other hand, if, as a result of your move to a competitor, Company A loses money, a lawsuit is more likely. A non-compete agreement may help your former employer win that lawsuit, but it is not the reason that the lawsuit is initiated – money is.
While non-compete agreements can be challenging to navigate, they are far from insurmountable and, depending on the nature of your job move, are often not an issue. If you find yourself bound by a noncompete agreement, consider these six strategies and, of course, consider consulting with a qualified employment attorney who can assess your situation and guide you through the process of breaking free from the constraints of a non-compete agreement.
For a free consultation, call us in New York City (646.524.6001) and Cleveland, Ohio (216.600.7994) or contact us any time. We will help you determine whether your agreement serves your best interests and whether you should attempt to negotiate better terms.