Non-compete agreements can seriously impact how skilled employees find work after leaving a job where they were required to sign a non-compete agreement. Few American workers remain with one employer for the duration of their career. Today’s workers frequently “hop” from job to job in pursuit of greater benefits and many companies are letting workers go in an effort to cut costs. The average American worker changes jobs ten to fifteen times during the course of his or her career, with an average tenure in each position of just 4.4 years. As a result of this trend, more employers are using non-compete agreements to protect what they perceive as company property.
What is a non-compete agreement?
A non-compete agreement is a legal contract that restricts an employee’s actions after the term of employment has ended. Oftentimes, the employer restricts the type of employment the former employee can pursue. Employees who receive specialized training may be completely barred from working in their own industry for a period of time and/or in a particular geographic area.
These agreements seek to protect intellectual company property. The idea assumes that the skills taught to an employee on-the-job and the knowledge that the employee acquired belong to the employer. A non-compete agreement prevents the employee from using these skills at a potential competitor. It also prevents employees from distributing sensitive company information. While it is important to protect a company’s secrets, these agreements can significantly limit a worker’s abilities to find work and can limit innovation.
In Virginia, non-compete clauses can only be enforced if:
- Restrictions are not greater than necessary to protect the employer’s legitimate business interests.
- The agreement is not unreasonably severe or oppressive in restricting the employee’s ability to earn income,
- The agreement does not violate Virginia public policy.
Who uses non-compete agreements?
In the past, companies required non-compete agreements to protect tangible things like a secret formula for a soft drink. Today, non-competes have a broader reach. There is a greater prevalence of non-compete agreements being used to protect the basic knowledge workers need to do their jobs. Non-compete agreements are even used by companies like Jimmy John’s to protect sandwich-making techniques. In general, however, these agreements can take a serious toll on highly-skilled professionals in tech and other industries.
Consequences of non-compete agreements
A non-compete agreement can limit the opportunities available or delay your progress in your industry. In some cases, they have prevented professionals from working in their industries for years at a time. Many may choose to take significantly less pay at more generalized positions when they are not able to keep a high position that requires their specialized skill set. Some professionals switch industries in order to keep their status, but at a significant loss of their continuing education in their fields. This is a huge problem for the tech industry, as many workers lose their incentive to gain knowledge and develop new skills. Research has supported this, finding that there is less investment per employee in states that enforce non-compete agreements, and less overall innovation.
Many employees may face a non-compete agreement after they have accepted the job offer and begun training, making it difficult to decline. Regardless of your industry, a non-compete agreement in Virginia should not significantly impede your job search. Attorneys Lisa Bertini and Andrea Ruege fight hard for your employee rights and can inform you about your rights and legal options. To speak with a non-compete attorney in Virginia Beach, schedule a consultation or call (757) 222-9165.