Can Employers Force Employees To Sign Non-Compete Agreements?
Are You Being Forced To Sign a Non-Compete Agreement? Let Our Business Attorneys Protect Your Rights
A non-compete agreement prohibits employees, business partners, vendors, and others from using the knowledge or contacts gained from that relationship to their own advantage. The agreement prohibits people from soliciting clients, using the same vendors or materials, and so on to then compete in the same marketplace.
An employer may ask you to sign a non-compete agreement when you are hired or contracted, or they may introduce the agreement prior to a promotion or some other change in your employment. Your first instinct may be to sign the agreement, but if you look closely at the terms and consider the long-term potential consequences of signing the agreement, you may realize that doing so is not in your best interests.
However, if you don’t want to sign the non-compete agreement, you may wonder whether your employer can make you do so. Here’s what a Chandler business attorney would tell you:
Is a Non-Compete Agreement Enforceable?
Unfortunately, the answer to this question in most cases is “Yes” – provided that the restrictions in the agreement are “reasonably necessary” to “protect the employer’s reasonable business interests.” Each case is different and it’s not always easy to tell what restrictions meet this test. Arizona is an “at-will” employment state, which means that it allows employers to terminate their employees at any time for any reason (outside of discrimination or other reasons that are protected by law). Therefore, if your employer asks you to sign a non-compete agreement and you refuse, your employer could legally fire you, unless you have a written agreement to the contrary.
In almost all cases, it’s important to review the employment contract and the non-compete agreement with a business attorney to learn about your legal rights and options. There may be exceptions in your employment contract that protect you.
Restricting a Non-Compete Agreement
If you are thinking of signing a non-compete agreement – either because you feel like you have no choice or because you don’t see the harm in signing – it is important that you review the document with an experienced Gilbert business attorney who can review the document and help you understand how it could impact your future career or business prospects. Your attorney would then counsel you on changes to make.
With an attorney on your side, you are likely to be more effective in your negotiations with your employer. Many businesses are used to dealing with employees individually, and these employees don’t always know their rights or understand the law. Working with an attorney shows that you are knowledgeable and empowered, and your employer is more likely to respond in a spirit of conciliation if they know you understand your rights.
Creating a Non-Compete Agreement For Your Business
Alternatively, if you own a business, you may want to consider creating non-compete agreements for your employees, particularly if you have trade secrets or work in a highly competitive market. An experienced business attorney will walk you through all the things that should be included in the agreements to ensure that they are enforceable and that they protect all your interests.
Your attorney will also draft the document to ensure that it is complete and it protects you from liability later. Your attorney can also advise you on what to do if employees refuse to sign, including what risks you might face if you fire them or what your other options may be for protecting your interests while also minimizing your legal liability.
Non-compete agreements can be useful tools for businesses to protect their trade secrets or the relationships and processes they have developed over the years. But it is important that you get the right agreement with the appropriate scope, and it is important that you properly balance your business’s needs with your employees’ interests. Everyone can win with the right non-compete agreement.
Hire a Professional Business Attorney In Scottsdale
The attorneys at Denton Peterson Dunn can help, whether you are a business looking to have a non-compete agreement created or you are an employee who is being asked to sign one. Our experienced business attorneys are committed to protecting your rights, and they’ll help you understand your legal rights and options to ensure that you are making the right decision and getting the outcome you need. We represent clients throughout the Phoenix area, including employees and small and large businesses. Contact us at our offices in Scottsdale, Mesa, or Phoenix today to schedule a consultation with a business attorney and learn more.