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Pro Tips: What Is A Noncompete Agreement?

Pro Tips: What is a noncompete agreement?

A noncompete agreement is a contract under law in which an employee agrees not to enter into a similar profession which is in direct competition with their employer.  Noncompete agreements exist in order to protect the employer from losing clients and valuable trade secrets.  However noncompete agreements can also drastically inhibit the capacity for an artist to make a living, especially if the artist (employee) is only working part time in the profession and looking for more work.

As a disclaimer, I am nowhere near a lawyer or legal expert, but I have experienced the pros and cons of noncompete agreements firsthand in the pole and aerial profession.  Noncompete agreements can be incredibly beneficial to your small business, especially if you are training your employees in a specialty or niche market trade.   For instance, let’s say that you open a fitness studio with a specialty focus, underwater tennis ball juggling.  You don’t know many people who do underwater tennis ball juggling, so you handpick a staff, train them in the art of underwater tennis ball juggling, provide them with certification opportunities and continuing education, and let them loose in the classroom.  A noncompete agreement would legally prevent your employee from heading down the street and opening up her own underwater tennis ball juggling facility, potentially snagging your clients and inevitably damaging your business. The legality of noncompete agreements differs from state to state, and many argue about the enforceability of such contracts.   Should you choose to require your employees to sign a noncompete agreement, two important factors play into the enforceability of the contract: the geographical distance from the employers business and the amount of time that the employee is restricted from practicing the trade after parting with their employer.

There is an entirely different side of the coin, and that is the effect that the noncompete agreement has on the artist (employee).  As an artist in a specialty trade, full-time employment can be difficult to find.  Artists who desire to make a living in their specialty field must often take every opportunity for employment in order to make a living, and the noncompete would most certainly prohibit this. Another factor to consider is collaboration with other artists.  Noncompete agreements can prevent creative and professional opportunities for collaboration within the community, leading to schisms in an otherwise supportive environment.

Depending on the severity of the agreement, employees can be restricted from practicing their trade for up to 100 miles distance or more from the employer’s facility, and three years or more from the time that the employee departs the company.  Such severe contracts are detrimental to the livelihood of the artist, especially if they choose not to seek employment in an unrelated field.  Artists may choose to break the noncompete contract if such severity exists, risking a potential lawsuit by the employer.  Because lawsuits are incredibly expensive and time-consuming, the employer may or may not consider the potential damage done by the former employee enough to take them to court, but either way a bad situation is created for both the employer and the employee when the noncompete contract is too severe, ignored or broken. Noncompete agreements can have very reasonable geographical and time restrictions. For part-time employees in niche markets like pole and aerial, 75 miles and 90 days seems to be the standard. This allows the employer enough time to recover from any potential loss while only restricting the employee for a reasonable period of time.

Ultimately, I believe noncompete agreements are a good thing for small businesses. As long as the employer asks reasonable restrictions of their employee, the employee should uphold their end of the deal should they choose to sign the noncompete. As an artist, you always have the option of not signing the noncompete agreement and going a different route.  As a business owner, if you choose to have your employees sign a noncompete agreement, make sure the agreement is legal in your state, reasonable, and enforceable in court.

Sophie Murphy
This Post Has One Comment
  1. […] place few limits on them” (New York Times) and not all of them are enforced. Sophie Murphy in her blog for International Pole Convention notes: “Because lawsuits are incredibly expensive and time-consuming, the employer may or may not […]

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