Some employers require certain employees to sign a non-compete contract, also known as a restrictive covenant to not compete. The terms of a non-competition agreement may prohibit employees from engaging in business with a competitor, starting their own business venture in the same industry, and/or soliciting clients of the former employer.
These contracts are designed to protect confidential information or trade secrets from being shared with other businesses. Often, the term of the non-compete contract extends beyond the term of employment, which can make it difficult for the former employee to find new work in their profession that wouldn’t constitute a breach of contract.
The details of non-compete contracts vary, and some are less restrictive than others. Not every worker will sign a non-compete clause as part of their employment agreement. And some non-competition agreements may not be enforceable if they’re considered too broad or unreasonable.
Are Non-Compete Contracts Enforceable in Indiana?
The enforceability of non-compete agreements under Indiana law depends on how reasonable the terms are. A non-compete contract may be deemed unenforceable by the court if the agreement:
- Is not necessary for protecting the business interest of the company, such as if the employee never had access to sensitive information
- Has unreasonable time restrictions
- Is unreasonable in geographic scope, particularly by prohibiting professional activity outside the geographic area where the company does business
- The scope of restricted activities is too broad
- The employee hasn’t been offered anything in return for signing the non-compete clause (the agreement should be connected to a job offer or some compensation)
Generally, Indiana courts don’t look favorably on non-compete contracts. The employer has the burden of proof, meaning they must show the court that the agreement is enforceable. The court may find a contract to be completely void or may hold both parties to a modified version.
What Happens if You Violate a Non-Compete Agreement?
If there is a non-competition clause in your separation agreement that is indeed enforceable, your employer can take legal action against you for violating your contract. They may pursue monetary damages, or, more commonly, an injunction. That means if the court upholds the contract, the employee must leave their new employer and continue to follow the terms of the agreement.
If you’re unsure whether your non-compete contract is enforceable, you should seek legal advice from an employment law attorney at HKM Employment Attorneys. Talk to us before pursuing an employment opportunity that may violate the agreement.
Non-Compete Agreement Attorney in Indianapolis
Employment contracts can be confusing, and it’s understandable if you have questions or concerns about the terms of your employment agreement. The employment lawyers at HKM Employment Attorneys LLP have the knowledge and experience to take on large corporations and small businesses alike.
Whether you’re curious about the enforceability of a non-compete clause or ready to take legal action against your employer for any other wrongdoing, we’re here to help. Call to schedule a consultation or visit our law office in Indianapolis to find out more.