When starting a job, an employer may ask you to sign agreements that limit what you can do during or after employment. Two common examples are noncompete and nonsolicitation agreements. While these contracts supposedly protect a company’s business interests, they can also affect your options in the future.
What is a noncompete agreement?
A noncompete agreement restricts an employee from working for competitors or starting a similar business for a specific time and within a certain area. Pennsylvania courts usually enforce noncompete agreements if they are reasonable.
However, state and federal laws put limits on how far these agreements can go. The restrictions should not be too broad, and the agreement must protect a legitimate business interest, like trade secrets or specialized training.
Noncompete agreements can make it harder to find a new job in their field. Before signing, consider how the restrictions could impact your career plans. If the terms are too limiting, you might struggle to find similar work nearby or earn a comparable income.
How does a nonsolicitation agreement work?
A nonsolicitation agreement focuses on preventing former employees from contacting the company’s customers, clients, or workers. It does not stop you from working for a competitor, but it does restrict your ability to use business relationships from your previous job. For example, you might not be able to ask former coworkers to join your new company or convince former clients to move their business to you.
These agreements are often easier to enforce than noncompete agreements in Pennsylvania. Their intent is to protect customer relationships and company goodwill. However, they do not limit where or when you can work, which gives more freedom in comparison with a noncompete agreement.
Noncompete and nonsolicitation agreements can impact your career options in different ways. Learning the differences between them helps you make better choices before signing. However, if you have signed an unreasonable agreement, you may be able to challenge it in court.
