When an employee joins a company, they may be asked to sign a noncompete agreement. A noncompete agreement restricts an employee from employment or other activities that would compete with their current employer’s business. Usually, the restrictions apply to a specified time frame and area.
Common disputes
Employees may dispute the terms of a nondisclosure agreement. They may have concerns that it is overly restrictive on their right to find future employment.
It’s important to have a clearly written agreement so disputes do not arise later over different interpretations of its terms, such as how confidential information is defined.
Employees may also state that they did not receive adequate consideration, like a bonus or confidential information in exchange for their agreement, which can cause a dispute. Also, if circumstances have changed since the employee signed the agreement, the employee may argue that it is unfair to enforce it.
Penalties for violation
The employer has several options if an employee violates the noncompete agreement. They will need to be able to clearly explain the specific actions the employee took that did not align with the agreement.
The employer may request an injunction from the court, which prevents the employee from continuing the competitive work, can request damages for financial losses that the company incurred because of the violation and can request reimbursement of legal costs.
However, the court will also consider whether the agreement unfairly prevented the employee from earning a living.
If an employer needs help to draft or enforce a noncompete agreement, there is assistance available.