If you work in a specialized field, one of the things that might be included in your employment contract is a non-compete agreement. A non-compete agreement may limit whether you can work a second job (moonlighting) or where you can work once you leave the company. It may also detail how long you have to wait before working with a competitor in the same market or in your local region.
All restrictive covenants are limitations on your freedoms, so make sure that you completely understand what your contract says before you sign.
Why do you need to review your employment contract before signing?
Non-compete agreements need to be both reasonable and specific to be enforceable, so look to your contract to understand things like:
- The length of time involved: Does the agreement prohibit you from working in the same field for a year? Does it stretch out longer?
- The geographic location involved: If you leave the company would you be prohibited from working for a competitor in the same city, the same state or even further?
- The circumstances: Does it matter if you were laid-off, fired or quit? Is the non-compete agreement still in force under all circumstances?
You also want to find out whether you are prohibited from working for yourself in the same industry once you leave your employer. Employers often want to keep their former employees out of the market (at least, for a while) so that they can avoid competition that has “inside” information about how they operate.
It is reasonable to negotiate a new contract with fewer restrictions as part of your agreement to work with a company. If you feel that the contract is too restrictive, then it may be better to look for another job opportunity. Get to know your legal rights to make sure you understand how signing may influence your career in the future.