Are Non-Compete Clauses in Employment Contracts Valid?

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I recently submitted the following question to the TV show “Canada AM” for a recent segment on employment law: “Non-compete clauses seem to be more common in employment contracts these days. To paraphrase: “If you leave our company, you cannot work for another company in the same industry for a period of two years”. Are these clauses valid; or just a scare tactic so you won’t leave to work for a competitor? What should you be careful of when signing a contact that contains such a clause?”

The question was answered by the employment lawyer, Daniel Lublin. You can view the video of his entire answer here, starting at about the 13:30 mark.

To paraphrase Lublin, there is a misconception in the workplace that non-compete clauses are not valid. Although in the past, some of the stipulations were completely unreasonable, in recent years, the courts have given better guidelines on how to make these agreements enforceable. As such, employers are getting better at drafting them. For example, for most people, a non-compete clause between 6 to 9 months is reasonable, and for senior managers and executives, 12 t0 18 months is the norm.

Lublin recommends carefully reviewing the post-employment obligations outlined in the employment contract before signing it. The same goes before you ask a potential employee to accept one. If you are not sure, don’t sign or offer it without seeking the advice of a lawyer first.

If you would like a template to track your entire job search process, you can download the Job Search Tracking Worksheet for free from the B2B Sales Connections Download Centre.

Simply put, the more you know, the better position you will be in your employment negotiations. Afterall, as the old saying goes, “Knowledge is power.” More motivational quotes here.

Aim Higher!

Susan A. Enns, The B2B Sales Coach, B2B Sales Connections

www.b2bsalesconnections.com, www.linkedin.com/in/susanenns, or www.twitter.com/SusanEnns

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