In 2016, The New York Times estimated that 30 million working Americans, or about one in five employed citizens, are subject to “non-compete agreements” (“To Compete Better, States are Trying to Curb Noncompete Pacts,” N.Y. Times, June 28, 2016). These agreements between an employer and a worker limit the worker’s ability to work after he leaves his employer, whether through being laid off, termination or resignation. Non-compete agreements can come in many flavors: do not work for our competitors, do not share our secrets, do not open your own business, do not ask our workers to come work for or with you, do not ask our customers or clients to come solicit your business instead. The evolution of how these agreements are used in the workplace is astounding. Once reserved for white-collar executives, non-compete agreements have found their way down to hourly workers working in routine service jobs.
States address the issue of non-compete agreements in different ways. In Washington, the watchword is reasonableness. If brought to court, a judge can rewrite a non-compete agreement to make it reasonable. A judge will look at three things when deciding whether to and how to rewrite a non-compete agreement.
First, the purpose of the non-compete agreement must be either (1) to protect the employer’s confidential information or (2) to protect the relationships or clients the worker developed while working with her former employer.
Second, the scope of the non-compete agreement must be limited to what is necessary to protect the legitimate interests of the former employer. This scope can include the geographic scope (neighborhood, city, county, state), the temporal scope (six months, two years), and the types of restricted activities.
Third, the non-compete agreement cannot be used to prevent legitimate competition. The consuming public has a right to prices that are set by free and fair competition and to necessary goods and services.
If you need help deciding how to respond to a non-compete agreement in Kennewick, WA, I may be able to help. Call Adam R. Pechtel, your trusted employment attorney, at (509) 586-3091 today.