Whether you are an athlete, a spectator at sporting events, an entrepreneur, or someone who thrives on human drama, competition is the spice of life. Ask the most successful people you know about the secret to their success, and they might tell you that their motivation to pursue the path that led to their great accomplishments began with a rivalry with a sibling or classmate. People who have become famous for their professional achievements might tell you the same thing, except that since they are famous, they would probably tell a journalist who was interviewing them, instead of telling you. Some people seem to be hard-wired for competition.
By contrast, some people dislike competition. They do not even like to play board games, because at least for the duration of the game, it turns friends into rivals. It seems to come down to a person’s temperament. During the job interview process, employers might want to hire you because of your competitive spirit, or they might choose to hire you because your instinct is to collaborate instead of competing. If you think it feels wrong for an employer to tell you when to compete and when not to compete, then you should think twice before signing an employment contract that includes non-compete provisions.
The Boulder non-compete review lawyers at HKM Employment Attorneys LLP can help you decide whether to sign an employment contract that requires you to restrict your economic activities in the interest of not competing with your employer.
Non-Compete Agreements are More Common Than You Think
Non-compete agreements usually occur in employment contracts. Their usual place is toward the end of the contract, amid the legal boilerplate and the fine print, somewhere between the force majeure clauses and the part that says whether you can bring disputes arising from the contract before the courts of Colorado or whether you must settle them behind closed doors through arbitration.
A typical non-compete agreement says that the employee may not engage in business activities that compete directly with the employer, such as establishing an independent business that provides the same products or services as the employer, or working for another business that competes directly with the employer. Non-compete clauses can restrict you from competing with your employer not only while you are employed by your employer, but also for a set amount of time after the employment relationship ends. The most enforceable non-compete agreements are specific about what you may not do and where and when you may not do it.
Don’t Market Economies Thrive on Competition?
It is easy to see how non-compete agreements benefit employers more than they benefit employees. The purpose of non-compete agreements is to protect businesses from former employees using the trade secrets and insider knowledge they gained from working for the employer in ways that harm the employer. Certainly, businesses have the right to protect their confidential trade information, but there are ways to do that without infringing on the employee’s right to pursue subsequent work opportunities where these opportunities present themselves. For example, the employer may register trademarks and other intellectual property rights, so that the employer may bring a trademark infringement lawsuit against former employees who use the employer’s brand name or other intellectual property without the employer’s permission. The contract can also have non-disclosure provisions that prohibit former employees from taking private information they learned at the company with them, but do not limit where the employee can work after the employment relationship ends.
The problem with non-compete agreements is that they give businesses control over former employees who are no longer on their payroll. It only makes sense that, once your job ends, you are free to get another job; unless your employer paid you so well that you can afford to retire early, getting a new job is the obvious choice. A non-compete agreement places your former employer in the role of a controlling ex.
At their worst, non-compete agreements are “you’ll never work in this town again” agreements. Imagine that you are a dental hygienist. If you stop working for your current employer, does that mean that you cannot get a job at another dentist’s office in Boulder? If your employer had it their way, you would have to retrain for a different career or move out of Boulder to avoid stepping on your former employer’s toes. This is simply not practical. Not everyone can afford a long-distance move every time they change jobs. Non-compete agreements are most appropriate for people who have held managerial roles in entrepreneurial projects. Despite this, many employers wrote non-compete clauses into their employment contracts, at least until a series of executive orders and other legal regulations aimed to curb the practice of abusive non-compete agreements. In 2020, one out of every five employees who had an employment contract but did not have a bachelor’s degree was working under a contract with non-compete provisions.
Legal Disputes Arising From Non-Compete Agreements
Technically, if you signed a non-compete agreement, your former employer can sue you if you moved on too soon after your job ended to another job that is too close for comfort to your former employer’s market niche. If your former employer does this, the burden of proof is on them to show that the non-compete clause is legally enforceable and that your actions violated it. Judges have the right not to enforce non-compete clauses that are unfairly restrictive. The worst-case scenario is that your former employer will prevail in the lawsuit and the court will order you to pay the amount of money that your former employer lost because of your competitive activities. The best way to avoid this problem is to negotiate with your employer to amend the non-compete provisions of your contract before you sign.
Contact HKM Employment Attorneys, LLP, About Non-Compete Review
The Boulder employment lawyers at HKM Employment Attorneys, LLP, can counsel you about your non-compete agreement before you sign it. Contact the employment lawyers at HKM Employment Attorneys LLP in Boulder, Colorado, to set up a consultation.
