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Executives Should Negotiate When Faced With An Employment Non-Compete Agreement

On Behalf of | May 6, 2021 | Employment Law

An employment non-compete provision states that while you work for the company and for a period defined thereafter, often a year, you will not work within a defined geographical area within that industry. If your career has focused in on that industry and you have ties to the area, a non-compete can keep you at a job you dislike or a job that provides little opportunity for advancement.  Certain employment non-competes are not enforceable in New Hampshire such as for example ones for small wage earners and  physicians.  Also the non-compete must be given to the employee before she accepts the job.

In general, employment non-competition agreements in New Hampshire are narrowly construed to protect the legitimate business interests of the employer.  Two areas that have been defined as legitimate business interests are the company’s good will and its confidential and proprietary information. This recognizes the employer has a right to prevent its employee from taking customers she worked with while at the employer and using confidential information to compete with the employer. For example if a sales representative only learns of a customer after she leaves the employer, none of the good will of the employer rubbed off onto the employee and a judge is less likely to enforce a non-compete to prohibit the employee for accepting that customer when she goes to work for a competitor. If an employment  non-compete is overly broad it may be found to be unenforceable.   Nevertheless an unenforceable non-compete can still prevent a new employer hiring you or you risking an expensive litigation with your former employer to defend a suit you can eventually win. Therefore signing a non-compete without negotiation can seriously impact your career path in the future.

If the compensation and job opportunities for the employment seem are good, it is still possible for the employer and employee to negotiate an agreement that eliminates the non-competition agreement or revises it so as to not be a major impediment to their employment.  For example, the employer may agree that the employee will not have a general prohibition of working in the industry for a geographic and time limit when she leaves but instead just prohibit taking customers with whom she had a relationship.  Another negotiated option could be that instead of a 15-mile radius from the Manchester, New Hampshire company non-compete for a year, which would block out a significant of the portion of the population in New Hampshire, the mile radius be limited to for example three miles of the location.  Depending on the industry, this could keep a former employee outside the immediate business community. Once an employee has signed a non-competition agreement and looks to change jobs, she should speak with an attorney to discuss options and strategies to protect her right to work.

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at [email protected].