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What you need to know about the non-compete agreement

When you get a new job, you will likely be given a contract that is known as a non-compete, or in it's full iteration, a non-competition agreement. This contract is incredibly important for both the employer and the new employee, so it is important for you to know exactly what it is and what it means once it is signed.

The non-competition agreement is something that protects the business from an individual fleeing the company and spreading its secrets and processes to a competitor. In return, the employee must be given something to make the agreement beneficial to them. This is why the NCA is usually signed as part of a job offer -- with the job serving as the benefit to the individual.

What this also means is that if you must sign an NCA after you have been hired, the company is obligated to give you some sort of benefit to offset the restrictions put in place on you by the non-compete. This could be a promotion, a raise, or some other form of legal benefit.

The document itself must comply with the rules and regulations it is associated with. The NCA, if challenged, will be heavily scrutinized by the courts. They will make sure that the company didn't "go overboard" with the restrictions and language within the NCA.

In general, the document has to "be reasonable," with emphasis residing on the document's scope and duration. In a practical sense, what this means is that the company can't block you from seeking other job opportunities by putting in excessive clauses and unreasonable restrictions. The company can't forbid you from working within the same geographical area as them, for example. And if the NCA was pertinent to confidential information, they can't forbid you from giving out that information forever. It should only apply as long as the information is relevant or applicable to the company.

Source: FindLaw, "Non-Competition Agreements: Overview," Accessed Aug. 6, 2015

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