Many industries require certain employees to sign non-compete agreements as a condition of their employment. But what exactly are non-competes and when are they commonly used?
A non-compete is a contractual clause preventing employees from working for competitor companies or starting rival businesses for a certain period of time after leaving their current job. The agreements aim to protect sensitive information, clients, and a company's competitive advantage.
While aspects differ state-by-state, non-competes tend to be most prevalent in professions where employees gain highly valuable skills, knowledge, or client access. Overly broad agreements face increased legal scrutiny.
Here are 5 fields where non-compete clauses are especially common:
- Technology & Engineering From proprietary systems to emerging inventions, tech firms frequently request non-competes from key engineers, developers, product designers and other specialized roles to retain competitive advantage in fast-moving industries.
- Sales & Business Development Sales talent with client Rolodexes and pitch mastery built from a company's training, resources and brand represent prime targets for competitor poaching. To protect their business relationships, sales teams often sign non-competes.
- Finance & Accounting Portfolio managers, tax experts and senior corporate finance positions rely heavily on cultivated professional expertise and knowledge around a company's investments, holdings, deals, clients and strategies. Binding non-competes aim to prevent immediate use of this insider access to undermine the former employer.
- Healthcare Doctors, nurses, technicians and researchers commonly sign non-competes because patient bases, treatment methods, medical discoveries represent hugely valuable yet highly portable assets if defecting staff take roles with competing hospitals, practices or drug companies.
- Creative Services Design firms, ad agencies, media producers, and market research outfits lean on non-competes for distinctive roles to block replicating creative products, campaigns, programming and other commercial art unique to each agency and crafted through their resources.
Understanding industry norms around non-competes enables smarter evaluation of job offers and contracts. Consult an attorney to ensure any restrictions only protect genuine interests without hampering your career. Negotiate overly broad agreements rather than silently jeopardizing your future flexibility.
If you are starting a new job that requires signing a non-compete or have been confronted with threats of enforcement from a past employer, consulting an employment lawyer is critical. They can accurately assess state laws and recent court precedents around enforcing non-compete provisions against someone in your profession. An experienced attorney in employment contracts can also provide expert negotiation guidance before signing any agreement to ensure favorable terms. And should overly restrictive clauses place your livelihood in peril down the road, a lawyer can best represent your interests in maneuvering a waiver, proper narrowing amendments or legal action if needed against unjust career constraints. Understanding non-competes' real-world impacts takes on heightened importance for trades facing frequent use. Let an employment law professional's specific counseling protect both your current opportunity and future flexibility.