If you are starting a new job or accepting a new role, your employer may ask you to sign a noncompete agreement. It might seem like little more than a formality, but it is crucial to stop and think before signing anything.
To determine whether you should sign this type of agreement, you should answer a few other questions first.
Do I understand what I’d be agreeing to?
A noncompete agreement restricts workers in future employment. They do this by preventing employees from:
- Getting a similar job in a specific geographical region
- Working for companies in the same industry
- Starting a new, competing business
These restrictions can be in place for years, so it is crucial to understand what agreeing to this will mean. Will it prevent you from finding a job? Will it mean having to relocate? Will it stop you from earning a living? Because so much can be at stake, you must assess what impact it will ultimately have on your life and career.
Why are they asking me to sign one?
Approximately 30 million workers have a noncompete in place. While they used to be reserved for specific scenarios involving high-profile workers with access to proprietary information, noncompete agreements are now far more common. In fact, some employers have every worker sign one, regardless of whether it is necessary.
As such, consider if it even makes sense for you. Will you have access to sensitive data? Is your employer devoting significant resources to training or employing you? Are you getting something substantial in return?
If your answers to these questions are no, there may be no legitimate reason for you to sign a noncompete agreement.
It is worth noting that Michigan is among the states supporting the Federal Trade Commission’s proposed rule to ban noncompete clauses altogether.
Is the contract even valid?
Contracts must meet specific requirements to be valid. A noncompete can be invalid or unenforceable if:
- It is too vague or broad.
- Your employer forced or coerced you into signing it.
- It does not protect a legitimate business interest.
- It is exceptionally unfair or does not benefit both parties.
Under these circumstances, it may not even be a legally binding agreement.
Before you sign anything, take the time to answer these questions. Doing so can help you better assess your options and protect your rights as an employee.