A non-compete agreement is a legal contract between an employer and an employee that restricts the employee from working for a competitor or starting a competing business for a certain period after leaving the job. However, sometimes employees violate these agreements, either intentionally or unintentionally.
Non-compete agreement breaches can have serious consequences for both the employee and the employer. Let`s take a closer look at what constitutes a breach and the potential consequences.
What is a non-compete agreement breach?
A non-compete agreement breach occurs when an employee violates the terms of the agreement by working for a competing company or starting a competing business during the restricted period. This can happen in a variety of ways:
1. Working for a competitor: If an employee works for a competitor during the restricted period, they are breaching the non-compete agreement.
2. Starting a competing business: If an employee starts a business that competes with their former employer during the restricted period, they are breaching the non-compete agreement.
3. Soliciting clients or employees: If an employee solicits clients or employees from their former employer for a competing business during the restricted period, they are breaching the non-compete agreement.
Potential consequences of a non-compete agreement breach
If an employee breaches a non-compete agreement, they can face legal consequences. Here are some potential consequences:
1. Injunction: The employer can seek an injunction to prevent the employee from continuing to work for the competitor or operate the competing business.
2. Damages: The employer can seek damages for any harm caused by the breach of the agreement, such as lost profits or lost clients.
3. Legal fees: The employer can seek reimbursement for their legal fees incurred in enforcing the agreement.
4. Reputation damage: The employee`s reputation can be damaged by breaching a non-compete agreement, which can make it more difficult to find future employment.
How to avoid a non-compete agreement breach
To avoid breaching a non-compete agreement, it`s important to understand the terms of the agreement. Here are some steps to take:
1. Read the agreement carefully: Before signing a non-compete agreement, make sure to read it thoroughly and understand the terms.
2. Keep a copy of the agreement: Keep a copy of the agreement for future reference.
3. Follow the terms: Make sure to follow the terms of the agreement, including the restricted period and any restrictions on soliciting clients or employees.
4. Seek legal advice: If you`re unsure about the terms of the agreement or if you`re considering working for a competitor, seek legal advice to ensure you`re not breaching the agreement.
In conclusion, non-compete agreement breaches can have serious consequences for both the employee and the employer. To avoid breaching the agreement, make sure to carefully read and understand the terms, follow the restrictions, and seek legal advice if needed.