Three details to consider when signing a non-compete

On Behalf of | Jul 31, 2020 | Employment Contracts |

A non-compete agreement helps to protect employers who may have a market strength based on an internal corporate interest or secret. You working for them, especially as a key employee, implies learning those secrets or leveraging those interests. Having access to them, quitting and using those secrets against your former employer may put them at an unfair disadvantage. But as Forbes points out, creating one that protects the employer while also avoiding harm to the employee is not as easy as it sounds. 

Indiana state law rules that these agreements are unenforceable if they are unreasonable. Unreasonable agreements tend to fall down in one of three areas: 


A non-compete agreement often restricts a signed employee from working with competitors during their employment and for many years after. Any agreement that demands a non-compete for 20-30 years effectively neuters a former employee’s chances of making a living off of their unique skills. 


Most companies have a limited reach. Competing with a former employer across the street is not the same as across the state. Restricting an employee from competing out to distances in the hundreds of miles may seem unreasonable. Considering each state governs non-competes in their own way, that might even be unfeasible. 


Depending on the company’s particular interest, many activities adjacent to a former employee’s market may not fall under the definition of competition. If an employer’s agreement is explicitly broad to stop any activity, it may fall flat in front of the courts. 

Indiana employees need to remember that they still have options available. Beyond these three, other details like discrimination in the workplace could possibly have an effect on these agreements after an unfair termination depending on the language in the agreement. 


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