What's a Non-Compete?

*this post was originally made to the @engagedlegal Instagram account*

A non-compete, also called a "covenant not to compete," is a clause in a contract -- or a separate contract-- that promises an employee will not take another job that is competitive to the employees current employer.

For example, a florist could sign a covenant not to compete saying they will not work for another florist within 25 miles for a period of 6 months after leaving their current job. A wedding planner could sign a contract that says they won't take a job with another planning company or in-house at a venue within a 45 mile radius from anywhere their current employer plans events.  And guess what? These are probably enforceable.  

Because states don't like restraints on the ability to make a living and/ or freedom of contract, non-competes are heavily regulated and differ from state to state. Each state has its own rules, but usually  

TIME

and

GEOGRAPHIC SCOPE

must be narrowly tailored to the smallest reasonable degree,  and specified explicitly.  

For example, in Virginia, a non-compete must be limited to 2 years maximum with a "limited geographic area" (that's super clear, right?!). If an employer exceeds those rules? The entire contract can be void. 😱 You heard it correctly-- Virginia won't re-write the contract to make it compliant with the rules (known as "blue penciling") -- and instead, they will kill it completely. Other states will simply "blue pencil" to a more reasonable time and scope.

Your Takeaway? Non-competes require careful legal review.  Always make sure the non-competes you issue are narrowly tailored to your state's laws, while keeping in mind that a non-compete you sign may be enforceable!