A non-compete agreement is there to protect vital business interests when an employee leaves that company.
Whenever sensitive information is shared between two parties, there is potential for that information to be exploited to gain a competitive advantage. A non-compete agreement or restrictive covenants are put into place to help formalise the relationship and provide legal remedies in the event of a breach.
However, a non-compete clause can be problematic as it can conflict with other necessary legal rights and principles such as freedom to work and restraint of trade. For example, a non-compete clause could be challenged on the basis that they are too widely drafted, since many clauses have a long period of time inserted or wide geographical area in which they apply.
To understand whether a clause is enforceable, the court will consider the restriction times, the geography of the restriction and whether it goes further than necessary to protect the businesses interests. To understand whether you should sign and potentially breach an employment contract, it would benefit from gaining advice from an experienced employment lawyer.
At MJW Law, we would be happy to discuss any contractual issues you may have as an employer or an employee, if this is under negotiation. We can also instruct if you are facing a dispute over a non-compete case.