Employment contracts are used to outline the terms and conditions of employees’ jobs, such as their salary, their duties, and other general aspects of their employment such as group health insurance benefits. Another aspect of an employment contract is the non-compete agreement. A non-compete agreement essentially forces an employee to either stay with that employer or to be out of work (in his or her field) for a specified period of time. Many non-compete agreements, while legally binding, are not in employees’ best interests and either should not be signed or should be contested in court if overly harsh.
Non-Competes Protect the Employers’ Interests
The point of a non-compete is similar to that of a trade secret: The employer put a lot of time and energy into creating a recipe, formula, or algorithm and they have the sole right to use that trade secret to their economic advantage. Except instead of a trade secret, in the case of a non-compete, the protected information is the employee. The employer invested time and energy into training the employee, and the employee’s knowledge is highly valuable in that field of work. To keep the employee at his or her current job and to stop him or her from accepting higher paying offers from the competition, employers use non-compete agreements. However, not all non-compete agreements are enforceable. Almost 40% of all Americans have signed a non-compete agreement at some point or another, according to PBS. Not all of those people knew what they were getting into at the time.
When is a Non-Compete Agreement Enforceable?
Most non-compete agreements are enforceable in Kansas courts, and the courts usually do not even get involved in such matters. Only when one or more of the following occurs will the non-compete clause nullified, as per Digital Ally, Inc. v. Daniel Corum:
- The non-compete agreement does not protect a legitimate business interest of the employer;
- The non-compete agreement creates an undue burden on the employee;
- The non-compete agreement is injurious to the public welfare; and/or
- The time and territorial limitations contained in the non-compete agreement are not reasonable.
An example of a non-compete agreement that would cause an undue burden to an employee who works as an electrical engineer would be to create a provision that would not allow the employee to work in any field of engineering for two years, even if they chose a field that did not compete with their employer’s business. Another type of unenforceable clause would be to put unreasonable time restraints on the employee, such as not allowing him or her to work in his or her field for five years.
Call the Kansas City Attorneys of HKM Today
If your non-compete agreement has placed you in undue hardship, such as not being able to work in your field for more than two years, it may not be enforceable. To find out more about your legal options, call HKM Employment Attorneys today.