Legal Blog

Labor and Employment FAQs: What does a Non-Compete Clause cover?

Non-Compete ClauseStarting a new job can be rather overwhelming, between the new company, new people, and all of the paperwork. You will undoubtedly spend a good portion of your first day reading and signing everything from tax forms and employee handbook to office procedures, benefits forms, and, of course, your employee agreement. This last document requires a little extra attention, especially when it comes to one provision in particular, the “covenant not-to-compete” or “non-compete clause.” What does a Non-Compete Clause cover? A non-compete prohibits employees from using their experience and their employer’s proprietary information to compete with their employer. There are two such types of non-competes: “in-term” covenants, which prohibit conduct while an employee is still employed, and “post-term” non-competes, which limit employee conduct after the employee stops working, typically two years after employment. And that is just the beginning. To make matters more confusing, not all non-competes are created equal, and in many instances, non-competes can be invalidated. It all depends on how the non-compete is drafted and the scope and nature of the conduct it attempts to proscribe. As is true for many jurisdictions, Virginia Courts take several factors into consideration when determining whether or not to enforce a non-compete clause, including function, geographic scope and duration. They ask the following questions:

  1. Is the restraint, from the standpoint of the employer, narrowly drawn, and reasonable in the sense that it is no greater than is necessary to protect the employer in some legitimate business interest?
  2. From the standpoint of the employee, is the restraint reasonable in the sense that it is not unduly harsh and oppressive in curtailing his legitimate efforts to earn a livelihood?
  3. Is the restraint reasonable from the standpoint of a sound public policy?

Non-Compete Clause Non-competes are not easy to evaluate. If you have any questions about Non-Compete Clauses, please contact Offit Kurman business law attorney Brian Loffredo at 301.575.0345 or bloffredo@offitkurman.com.Brian is a commercial litigator with more than thirteen years experience representing clients in the construction and franchise industries.  He is a member of the Maryland Bar Association, Franchise & Distribution Law Committee, on whose Board he has served for more than four years. Mr. Loffredo is a frequent speaker to associations and other business audiences on topics related to home improvement law, construction law and franchise law. Offit Kurman Attorneys at Law: Labor & Employment Law Practice Group At Offit Kurman Attorneys At Law, the attorneys in our Labor & Employment Law Practice Group have the knowledge and experience to provide sound guidance in labor and employment issues. Our employment attorneys assist employers in staying current with changes in the law and making proactive decisions regarding workplace policy and procedure. From labor negotiations and alternative dispute resolution, to wage and hour investigations and charges of wrongful termination, the labor attorneys at Offit Kurman Attorneys At Law are skilled at helping to resolve the challenging workplace issues employers face every day. If you would like to learn more about Offit Kurman’s Labor & Employment Law Practice Group to see what we can do for you, please fill out our contact form to access the knowledgeable legal guidance that our experienced labor & employment attorneys offer. You can also connect with Offit Kurman via FacebookTwitterGoogle+YouTube, and LinkedIn. Sources: I signed a Covenant not to compete – now what?