employment competition
What legal standing do non-compete clauses have in employment contracts?
<p>Almost every job I have ever held has a non-compete clause, lasting for up to a year after I leave a particular organisation, prohibiting me form delivering similar services on behalf of a competitor.</p>

<p>Are these clauses actually valid in a court of law? I'm most interested in UK law, but as most of these roles are for international companies, any examples would be useful.</p>

<p>I can answer for the U.S., if that's helpful.</p>

<p>The general rule, in the United States, is that covenants not to compete are enforceable as long as they are reasonable. What constitutes "reasonable" varies from state to state.</p>

<p>Factors considered generally include:</p>

<ul>
<li><p>What kind of actual harm will come to the business if you go to a competitor? In other words, is this rote language they include in every contract, or did they put it in yours because you know all the secret formulas and have the customer list memorized?</p></li>
<li><p>Is it reasonable in time, location, and scope? Something preventing you from taking any job anywhere in the United States for ten years won't be enforceable; something preventing you from taking a job with the exact same title in the same industry in the same town for the next six months might be.</p></li>
</ul>

<p>The general rule at common law was that covenants not to compete were unenforceable restraints of trade; the fact that they're enforceable at all is later law created by each jurisdiction, and that means it's going to vary based on your specific jurisdiction. If you want to know whether it's okay to take a specific job based on a specific non-compete you signed, you will need to talk to a legal professional licensed in your jurisdiction--and even she may not be able to tell you for sure.</p>

<p>Another US-based answer:</p>

<p>We talked about non-competes in my one-semester of business law class (I'm an MBA, not a lawyer). I remember the professor (who <em>was</em> a practicing lawyer) saying that a well-written non-compete is absolutely enforceable and not to let anyone convince you otherwise. </p>

<p>He didn't get into the gritty details for a bunch of dumb managers like me, but I remember him saying that it had to be reasonably time bound (one-year was the most common example used in class), narrowly scoped to protect the valid interests of the employer (e.g., you can't prevent someone from working in marketing for one year, or prevent someone from working in NYC for a year, but you <em>can</em> prevent someone from working in marketing in NYC for a year if that's a market your firm operates in), and one other criterion I can't remember any more.</p>

<p>The bottom line that I took away (which I think was all he was trying to get us to remember) is that if you are asked to sign a non-compete, take it seriously.</p>
