Can a company enforce a non-compete clause that prevents a salesperson from competing in the same industry?
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Can a company enforce a non-compete clause that prevents a salesperson from competing in the same industry?
Noncompete states that the employee cannot compete in the same industry for 1 year in CT, MA, RI, ME, NH and VT. The employee lives and works in CT and has worked exclusively in the industry for 24 years. This agreement is being requested by a company with which the existing employer has merged. The employee is concerned that the non compete will prevent her from earning a living if the new company does not work out.
Asked on October 30, 2016 under Employment Labor Law, Connecticut
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
Non-competes are enforceable, even ones that have a significant impact on an employee's ability to work or earn a living, and an employer can require employees to sign them or be terminated--the agreement will be enforceable, because the employee signed it in exchange for continued employment, and so received "consideration" for the agreement.
There are some limits:
1) Unless you also received some separate or bonus payment, above and beyond your continued employment, for signing, it will only be effective if *you* voluntarily leave. If you are terminated or laid off, the agreement is no longer enforceable, because in that case the employer breached its obligations (continued employment) and took away the consideration (employment) you were getting for the agreement--so they can't prevent you from working if they terminate you (unless agan, you received some additional payment to sign).
2) Courts will reduce or "blue line" agreements that are too long in duration or excessive in geographic scope. This is very subjective (so no way to say definitivel whether or not your agreement is excessive), and if you are as senior as your question suggests, if the states you describe are the reasonable market for whatever you are selling, it may be that this is enforceable in scope. But it is also possible that it is too long and too broad and would at least be reduced, if it is excessive for your market and your seniority level (the higher level you are, generally, the longer they can hold you for).
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