Your employer may demand that its new new employees sign a non-compete agreement before you start the job or if it is implementing a new program requiring such agreements. Such agreements usually go into effect when you leave that company. Employers ask you to sign non-competition agreements for a variety of different concerns. These concerns are protection of trade secrets, customer relationships and business goodwill. Courts generally disapprove of non-competition agreements if they simply are designed to limit and restrict a former employee’s right to earn a living. Non-competition agreements are therefore closely scrutinized by the courts for reasonableness and to make sure that they are not overly restrictive.
The Law’s Criteria for Non-Compete Agreements
In order to be considered legal, a non-compete agreements must:
- Be supported by consideration (provision of some benefit to the worker) at the time signed;
- Protect a legitimate business interests of the employer; and
- Be reasonable (as opposed to overly and unnecessarily broad) in scope, geography, and time.
Non-compete agreements must generally be supported by legally valid and legitimate consideration — the employee must receive something of value in exchange for the promise to refrain from competition. In Illinois this can be a payment of money or two years of employment following signing the non-compete or other benefits. If an employee signs a non-competition agreement prior to beginning employment, the employment itself will be sufficient consideration for the promise not to compete if such employment continues for two years. Continue reading ›