This is a question you will need to consider both from the point of view of the business and of the employee. Additionally, you will also need to look at the specifics of a non-compete clause in order to decide if it may be fair to both parties or if it is too broad and over-reaching.
If you were to put yourself in the place of a company owner who has invested a lot of time, money, and effort into developing the business, you might agree that it would not be fair to allow an employee to walk away with knowledge and clients that could create competition and bring profits down.
On the other hand, a former employee also has the right to continue to make a living, and non-compete clauses have to be reasonable based on the kind of business it is.
While most states do allow non-compete clauses in employee hiring contracts, the idea of which limitations are reasonable and which are excessive and unfair has been argued in the court of law. There is a lot to consider, including geographical restrictions and the amount of time since the employee left a given company. What may make sense for one kind of business may not apply to another.
For example, a doctor may be allowed to continue treating a patient with an ongoing illness even if the doctor leaves one practice and joins another. On the other hand, an insurance agent who leaves one company and moves on to another may have had to sign an agreement that would keep him or her from taking clients along to the new agency.
Geography and time elapsed have to be considered. For example, would it be reasonable to require an employee of a petsitting service not to open his or her own business doing the same kind of work if it is outside of a specific limited geographical radius? Jobs such as this that require hands-on rather than remote work would have their own specific non-compete considerations that might make geographical limitations important.
Also, it can be unfair to require an employee to sign a non-compete agreement that is binding for an unreasonable amount of time after the employment ends. Again, what may be considered fair will depend on the type of business and the specific state laws and legal precedents already in place.
While there is nothing wrong with having the opinion that there should never be non-compete clauses for any kind of employment, it is important to keep in mind the reasons for their existence.
Saturday, November 16, 2013
Do you support Maryland's law allowing non-compete agreements subject to certain conditions? Do you support an employer's ability to restrict and/or prevent an employee from taking a position or owning a company that competes against the employer after the employee has terminated his or her employment?
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