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What you should know about noncompete agreements

On Behalf of | May 6, 2020 | Employment Law |

When your employer offered you a contract, you may have spent more time on the sections about compensation and benefits than other parts of the document. After all, at the time, you were looking forward to a career with the company.

Now that you know the company is not a good fit for you, it is time to look at the contract again to see if your employer can keep you from finding a better job somewhere else.

Why companies use noncompete agreements

Your employer may not have crafted a noncompete clause designed to punish you for leaving, although it may feel that way. These agreements prevent employees from taking confidential information from their employer and using it at another company. This may include trade secrets, intellectual property, client relationships, business processes and more.

Companies invest time and money into training their employees, and they may have this in mind when they craft their noncompetes. Your employer may see this clause as a means of keeping headhunters and competitors from stealing you. Your employer also may want to impress you with the importance of the information it entrusted to you.

When noncompetes are unenforceable

While you may understand why your employer included the agreement, you still need to be able to have a fulfilling job that allows you to excel and be happy. If your employer has restricted your potential too much, you may have to set your career aside and find a job that is not in your field.

Fortunately, Wisconsin law prevents employers from including unreasonable noncompete clauses in their employment contracts. The restrictions are only legal if the employer can show that they are necessary for protecting the company from unfair competition. If the court rules that the clause is not reasonable, the entire thing may become invalid, and not just the portion that is too restrictive.

Your employer may not be able to keep you from joining a company that is in a different geographical location, or that is not in direct competition. Your employer also cannot extend the duration of the restriction beyond what is reasonable. Generally, six months to two years is the range that a court may find acceptable, although judges review the contracts on a case-by-case basis.