Most courts will not enforce a “non-compete agreement” or a “covenant not to compete” that is not limited to a specific duration of time. This is because public policy favors people having jobs and being able to earn a living in the industry in which they have been working. Accordingly, most non-compete agreements include a time limit on which an employee may not own or work for a competitor after leaving the company. For example, if an employee leaves her company, the covenant not to compete may prevent her from owning or working for a competitor for a six months or a year after the end of her employment. The longer the duration of the restriction on competition the more likely a court is to find the covenant unreasonable and therefore unenforceable. Our Chicago non-compete agreement litigation lawyers can analyze whether an agreement is likely to be enforceable.
In determining whether the duration of the non-compete agreement is reasonable, a court must balance competing interests. On one hand, it must ensure that the agreement does not impose undue hardship on the employee in terms of finding a new job. On the other, it must also ensure that the company is not harmed by the employee’s departure. In today's ever changing world, significant changes can happen within a company in a matter of months. The result of this is that any trade secrets that the employee has that could damage her former employer may lose their relevance after just a few months.
Many courts will hold as enforceable covenants not to compete which have a duration of six months. A year is also a common limit for covenants not to compete, but in that instance, the company may have to prove to a court that such a restriction is necessary to protect their legitimate business interests. Covenants not to compete which last longer than a year are far less common and far less likely to be enforceable. Again, it would be the responsibility of the company to prove that covering such a broad time period in a covenant not to compete would be no more than that which is absolutely necessary to protect their legitimate business interests. The non-compete agreement litigation attorneys at our Chicago firm can represent you in this type of case.
While this provision in employment contracts for covenants not to compete to last a certain period of time has clear benefits for the employer, the employee may need a source of income right away. Many employees cannot afford to wait several months before finding another job. Compounding the issue is the fact that a covenant not to compete which lasts a year after termination of employment with the company may mean that the employee has to wait a year before she can even begin looking for another job in her field. Depending on the job market, this could well mean that the employee has to wait several more months after the the covenant not to compete goes out of effect before getting another paycheck. As with all covenants not to compete, the duration of the agreement must not impose undue hardship on the employee.
Because of the possibility of imposing undue hardship on the employee, a company must make sure that the duration of their covenant not to compete is no more than that which is absolutely necessary to protect their legitimate business interests. If the employer cannot prove that the covenant not to compete is not overly broad to protect their legitimate business interests, or if an employee can prove that the non-compete agreement imposes undue hardship on her effort to find other gainful employment, a judge may find that the covenant not to compete is unenforceable. The employee would then be free to seek employment with any company at any time that they choose.
The Chicago non-compete agreement litigation attorneys at Lubin Austermuehle, P.C. have decades of experience negotiating and litigating cases of disputed non-compete agreements in DuPage and surrounding counties. They have the most up-to-date knowledge of developments in the law regulating employment contracts and non-compete agreements. To see if your non-compete agreement is enforceable, contact us online today or call us at (833) 306-4933 for an appointment with a non-compete agreement litigation lawyer in the Chicago area.