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What 5 Questions Should You Ask Before Signing a Non-Compete?

Over the years, employment opportunities have become increasingly aggressive and competitive. Employers have the luxury of being extremely picky when it comes to hiring and employees may be willing to deal with less-than-ideal jobs in the interest of having a steady paycheck.

However, just because the job market is fairly volatile right now doesn’t mean that people should make important employment decisions without thinking about the long-term impact. For instance, before signing an employment agreement with a non-compete clause, it can be crucial to thoroughly consider what the clause could mean for the future.

5 questions to ask before signing a non-compete

  1. Who is limited by the contract? You should understand your limitations as well as the limitations of your potential employer.
  2. What opportunities are limited? The answer to this question should include the specific roles or companies that you would be prohibited from working.
  3. When will the clause expire? There should be restrictions on how long the non-compete clause will be in effect. Whether it will be in place for six months of five years can make a huge difference on your post-employment options.
  4. Where will you be prohibited from working? Some non-compete agreements set boundaries for future employment based on location. Knowing these restrictions could impact whether a person will have to actually move to find suitable employment if future prospects are restricted.
  5. Why is there a need for this clause? Non-compete agreements should only be necessary if they protect legitimate interests of a business. If the contract seems frivolous, it may not be valid.

Asking these questions can help you understand your options when it comes to deciding whether you should sign the agreement and how you may need to negotiate. In either case, it can be crucial to review the employment contract with an attorney who can spot potential issues and help both employers and employees avoid costly mistakes.

Source: FindLaw.com, “Non-Competition Agreements: Overview,” accessed on April 28, 2015