Is a contract given to employees which prevents them from working at competing companies in the future valid?

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Is a contract given to employees which prevents them from working at competing companies in the future valid?

I am the owner of a small tuition business. A competing company has recently introduced contracts which disallow their employees from working at competing businesses if they ever quit. However along with specifying my business they also name me personally in the contract. Is this a valid agreement?

Asked on January 18, 2012 under Business Law, Colorado

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Non-competition agreements between an employer and employee are valid--both those just generally forbidding working for competitors and those naming specific businesses or individuals as forbidden. However, while these agreements are enforceable, they cannot be open-ended--courts will not enforce them against rank-and-file employees forever. Typically, most employees can only be barred from working at competitors for 6 - 12 months. (Company owners who sell their companies can, as part of the sale, be subject to more restrictive agreements.)


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