When is a non-compete unenforceable?

Question Details:

I work for a small company that has clients nationwide; after working here 3 years I was asked to sign a non-compete. A week before I was asked to sign the agreement my boss, who had worked here 18 years, had been fired for not signing the non-compete and I am certain I would have been fired if I had not signed. I am now in charge of marketing for our organization and I am pretty sure I am the only employee that has signed the non-compete agreement. The agreement states that I will not for a period of 3 years work for another organization that "supports" the type of employee benefit administration that we do. Is this agreement enforceable?

Asked 1/31/2012 under Employment and Labor | 54 View(s) | More Legal Topics

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Employment and Labor Law Answers

It is enforceable, but the duration may be too long: when there is a dispute, courts will "blue pencil," or reduce in scope, a non-competition agreement which is seen as excessive. Since your current company has nationwide clients, it is not unreasonable for the noncompete to not be limited to a narrow geographic area. However, it is very rare for a non-owner of a business to be held to a non-competition agreement that is more than a year long; it  is therefore likely that the duration of the agreement could be modified downward by a court. Also, another point of possible contention would be what constitutes "support" in this case...for example, if your company handles benefits administration, would a company which provides purely tech support for a client's payroll software be one that "supports" your company's type of employee benefit administration? I would argue not, but clearly, the exact scope of what is meant by "supports" is a place you and your employer could come into conflict, and where, if that happens, a court would have to interpret what is meant by that.

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