Can my employer stop me from working for a competitor?

UPDATED: Sep 30, 2022

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Can my employer stop me from working for a competitor?

my current employer wants me to sign a
paper that says that I need to wait 2
years after quitting or getting
terminated OR 6 months after getting
involuntary terminated.

Asked on November 14, 2016 under Employment Labor Law, Alaska


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

Yes, a noncompetition agreement is legal and your employer can require you to sign one, or terminate you. Generally, however:
1) They are generally only enforceable if you quit/resign or are fired "for cause" (for wrongdoing); if terminated not for cause, they would only usually be enforceable IF you received some separate payment, bonus, or benefit, other than simply having your job, in exchange for signing. That is because the noncompetition agreement is generally an agreement that in exchange for having a job, you will not compete; if they terminate you when you did nothing wrong, they have breached their obligation under the agreement and that breach lets you consider the agreement to be terminated. Also, all contracts need "consideration," or something of value, exchanged between the parties to bind them. The consideration the employer gives the employee is employment; take that away involuntarily and without good cause, and there is no consideration.
2) Even when courts enforce non-competes, they can "blue pencil" them to reduce terms that are excessive, unfair, or unnecessary for the employer's protection. Typically, 2 years is longer than would be enforced vs. a non-executive, senior sales person, or (former) owner employee; usually, 6 months to 1 year is an enforceable length. So this contract could be reduced by a court if challenged.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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