Is my non-compete enforceable?
Non-competes.
Often you casually sign them when starting a new job. However, someday you will probably need to change employers. And sometimes you are leaving your job to join a company that in some way competes with your old employer. Now, it comes back to you. What about that non-compete I signed years ago? You may think to yourself, “those things are not really enforceable — that’s what everyone says…”
You may think, “After all, how can I be prevented from practicing my livelihood or earning a living. I am a Widget Salesman, so I should be able to sell Widgets for Acme, just as sold them for my former employer, Blackwatch.”
Unfortunately, that is not the way of the world, at least, not the way in the State of Washington. If you enter into a contract that includes a lawful non-compete clause, courts in Washington will enforce it. This can cause serious problems for the employee, as well, as his or her new employer.
That’s the bad news. But there is good news. In practice many employers have non-compete clauses that are invalid because the agreement is not a lawful contract. Or the non-compete is unlawful because it is too broad.
First of all, if you enter into the non-compete agreement after you have started employment it is likely that it is not enforceable in Washington. Unless the employer exchanges something with you for your promise to abide by the non-compete, the agreement will not be enforceable. In legal terms, the agreement will not be a contract because it lacks of consideration. For a contract to be valid, both sides must exchange, or promise to exchange, something of value. If you sign the non-compete before you start working (before you are an employee) then the promise of future employment is considered valid consideration for your promise. If you sign the agreement after you have been employed for awhile then the employer has to give something in exchange for your promise not to compete. E.g., A promotion, bonus, etc. Continued employment is not enough. When non-competes are entered into during employment, the necessary consideration is rarely given to the employee. An agreement without consideration is not a contract. Therefore, there is no legal obligation to abide by it.
Second, the non-compete may be too broad to be unlawful because it is not reasonable. A reasonable non-compete must be limited to what is necessary to protect the interest of the employer. Determining if a non-compete is too broad depends on the specific circumstances of the employment and the language of the non-compete. Some hints that the non-compete is unlawful include: no time limit (e.g, many valid non-competes will have a duration of 1 year), geographic distance (e.g., limiting non-compete to within 100 miles of the employer), and banning the employee from working for competing employers in positions that would not threaten the employer. An over broad non-compete is considered void.
If the non-compete has one these defects, among others, the non-compete will be unenforceable. Of course, your specific circumstances will determine whether your non-complete is enforceable. Therefore, be sure to seek legal counsel to help you analyze your situation. If the non-compete is lawful it will be enforced by the courts against you and possibly against your new employer. Otherwise, you can ignore it.
Good luck.
