Don't Sign That Non-Compete Contract!
Posted by
Dan FrithMarch 26, 2009 9:27 AMWe all know these are difficult economic times. Banks are struggling and the stock market just keeps going down...down....and down. Many business, both small and large, are requiring furloughs and reducing payrolls.
We have consulted with several clients over the last few weeks who have lost their jobs due to cutbacks. These folks have worked hard and played by the rules...only to be pushed out of the door when times get tough, and here is where it gets interesting.
Many terminated employees are provided a "severance package" of benefits. Say, one month's salary and benefits BUT they are asked to sign a non-compete agreement in return for the severance package. Be very, very careful if you are asked to sign a non-compete agreement.
Each state looks at non-competes differently, and my home state of Virginia has its own approach to the legality and enforceability of these agreements. In Virginia, if the agreement is reasonable in terms of geographical scope and duration (length of time) most courts will enforce the agreements. However, to say that each agreement is unique and each case is different is an understatement. The bottom line - consult with an attorney familiar with this area of the law BEFORE you sign a non-compete as part of your severance package.
If you live and work in Virginia, take a look at our blog, the Virginia Non-Compete Law Blog, which has over 150 articles discussing these important issues.