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Non Competition Agreement

Some employers may require new employees to enter into non-competition agreements before beginning work, and such agreements usually take effect after the employer-employee relationship has ended. Employers may require non-competition agreements for a variety of reasons, including protection of trade secrets or goodwill. Many times the common person will ask, “What is a non-competition agreement?” Most people are unaware of how to enforce a non compete agreement, or what the non compete agreement laws are. Read below the top five questions regarding non compete agreement questions that have been answered by the Experts.

Is a 24 month non-compete clause enforceable in Arizona?

Under Arizona law, a non-compete agreement of this type must be analyzed to determine whether it is reasonable. The burden of showing reasonableness is on the employer seeking to enforce the agreement. The employer also must show that the agreement is no broader than what is necessary to protect the employer's interests. In large part, whether it's reasonable is based on the specific facts of the case, including the type of work performed and the employee's access to information not generally available.

If someone has a non compete agreement with their employer and requested an evaluation to consider a raise , could a change in compensation from the original contract be viewed as a breach of contract if the party leaves and decided not to recognize the non compete agreement?

In order to try to argue that the non-compete is not enforceable, the employer will have to breach a term of the employment agreement first -- it can't be the employee. Even if the employer breaches it first, she/he may still be able to argue that the non-compete clause is still effective and enforceable if the employees contract includes a clause that basically says if a court declares one provision invalid, all the other clauses are still effective. The employee can always ask the employer for a release from the non-compete clause in exchange for a change in the employees compensation.

How enforceable are non-compete contracts in the state of Iowa?

Under Iowa law, it could be enforceable, but the courts tend to interpret them narrowly, which is good for the employee.

What states does the Non compete agreement hold up? Does someone need to have an up to date contract, can they change their job description, and still hold the party to a Non Compete?

Non-compete agreements are totally invalid in some states, (i.e. Montana, Nevada, North Dakota, and Oklahoma) some states consider non compete agreements invalid or in some case limited, (i.e. California, Colorado, Florida, Hawaii, Louisiana, Oregon, South Dakota, and Wisconsin.) While the remaining states consider the covenant as being at least partially valid; partially valid means the less the former employee is restricted, the more enforceable to agreement. (Ex. an agreement indicating an employee can never compete against their former employer in any state will more than likely be found invalid, yet a restriction of 1 year in an immediate area will more than likely be found valid. A non compete agreement may also have some issues that a court would conclude were invalid, while other issues were deemed to be valid.) With regard to changes in your pay or job duties, the employer must abide by the agreement in order to enforce it.

If an employee has a 5-year non-compete agreement with the company that the party sold their company to and it has compensation attached can the employee file for unemployment while still receiving this money from the non-compete?

Anyone can apply for unemployment benefits, but it is not likely the employee will receive benefits until one week after their last severance payment. Since the employer is paying the employee in increments, the unemployment agency will or have likely designated the employees severance as payment in lieu of wages/notice, such that it would be the same as wages and make the employee ineligible for benefits until the payments stop.

Non-compete agreements and the laws on the breach of a non compete agreement can be confusing for many. Experts can help with insight on the toughest questions that may arise.
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