When you work for a company, you may receive more than your salary and benefits. You may also learn a host of new skills and have access to proprietary information about how the company operates.
Because of this, employers often ask for you to sign a non-compete agreement in NC as a condition of working for them. Under the contract, you may agree not to use company secrets or solicit clients to benefit a competitor, and the employer agrees to confer a benefit on you. But are non-competes really binding, and if so, when?
Our guide helps you understand North Carolina non-compete law and when non-compete agreements are binding (and when they’re not). If you have specific questions about your situation, you are encouraged to speak with an experienced North Carolina employment attorney at EMP Law.
We serve clients throughout North Carolina and have offices in Winston-Salem and Charlotte.
Understanding North Carolina Non-Compete Law
North Carolina has particular rules about the enforceability of non-compete agreements. The goal is to balance the employer’s interests to protect their trade secrets and an employee’s freedom to work.
North Carolina courts generally disfavor non-compete agreements, but there are certain circumstances where they deem them enforceable.
When Are Non-Competes Enforceable in North Carolina?
A non-compete agreement’s legality depends on whether it meets the requirements under North Carolina law.
To be enforceable, non-compete contracts must meet the following criteria:
- It must be in writing;
- It must be signed by the restricted employee;
- It must be reasonable as to the time and geographical scope of the restrictions;
- It must be supported by sufficient consideration;
- It must be entered into during the employment relationship with the employer (usually at the beginning or before a substantial change in pay or position);
- It cannot be against public policy; and
- It must be designed to protect a legitimate business interest.
Often, the non-compete agreement is a clause within the employment agreement rather than a separate contract. In determining whether the time and geographical scope of the restrictions are reasonable, courts typically look at these together.
Let’s say that a non-compete restricts an employee’s ability to work for any competitor in the United States for two years after they no longer work for the employer. The court will likely find this to be unenforceable.
If, however, the agreement restricts the employer’s ability to work for competitors within a specific city or county in the United States for the same amount of time, the court may find this valid.
When Are Non-Competes Unenforceable in North Carolina?
Non-compete agreements that unreasonably restrict a worker’s right to get another job are typically invalid. What’s reasonable depends on the circumstances and the legitimate business interests of the employer.
For example, let’s say an employee works at a meat processing facility as a production worker in a particular city. As a condition of employment, the employer requires the employee to sign an agreement promising not to work for any meat processing facilities in the United States for two years.
Most likely, the court will find this agreement unenforceable because it is overly restrictive. Restricting the employee’s ability to work for any meat processing facility in any capacity anywhere in the United States for that length of time is most likely unnecessary to protect the employer’s interests in this case.
Can I Work for a Competitor if I Signed a Non-Compete?
If the non-compete agreement is enforceable and a reasonable restriction on your right to work, you may be barred from working for a competitor.
It depends on whether the agreement meets the requirements outlined above and is reasonable under the circumstances. If you have specific questions about a non-compete agreement you signed, speak to a qualified attorney to discuss your situation and legal rights.
Contact the Experienced Employee Rights Attorneys of EMP Law
We understand that having the freedom to work where you want is fundamental to building a sustainable and rewarding life. When you start a new job, you may feel pressured to sign whatever agreements you need to begin work and get paid.
Our attorneys help you understand and protect your legal rights to keep unscrupulous employers from keeping you from living your best life.