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Employment discrimination
Hiring and employment
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Attorney directory
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Agreement Not to Compete
Non compete clause contract, non compete agreements, non compete clause
1. Definition of agreement not to compete or a restrictive agreement
Agreements not compete are also called legally binding agreements which
inhibits the employee who signs this agreement to establish a company
in the same line as the employer in a specific location within a specified
length of time. This agreement is normally incorporated in employment
contracts, applications for employment and in agreements where a proprietor
sells his company. By signing such a contract, it means that you agree
not to take on any commercial activity that will put you in direct competition
with your former company, as an employee, proprietor, partner or financial
partner within an agreed territory.
2. Is it a requisite for a job applicant to sign a restrictive
agreement?
It is not a prerequisite, but if you don’t sign it, there is a big possibility
that your future employer will take your refusal to sign as an affront
which will be a reason not to hire you. On the other hand, if your current
employer decides to make you sign an agreement not to compete which was
not stipulated in your employment contract when you were accepted for
the position and you refuse, then it could become a justifiable reason
to fire you.
3. Is it lawful to make my refusal to sign the restrictive agreement
as basis for not giving me the job?
Yes and no. The answer will depend on the laws of the state that you are
in and your specific circumstance. You could look at the rationality of
the restrictive agreement.
4. What are the legal considerations which will establish the
reasonableness of a restrictive agreement?
Generally, restrictive agreements are srcutinized by the state legislators
and it could be that laws could vary form state to state. However, there
are some basic aspects which would ascertain if a restrictive agreement
is rationale:
• Is there really a valid benefit that the employer is trying to protect
through the restrictive agreement?
• Or could it be that the employer’s purpose is plainly to repress competition?
• What is the range of the territory that will be covered by the restrictive
agreement? Will it deny you the opportunity to earn an honest living?
• What is the duration of the agreement?
• Will the agreement stop you from doing a job that is so diverese from
your former job?
• Were you given extra payment or benefits in exchange for signing the
restrictive agreement?
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