Non-compete Clause

The Employment Contract’s Covenant Not to Compete

January 8th, 2014 by W. Thomas Bunch, Sr.

Non-compete Clause

Many individuals blindly sign employment contracts so that they can get back to work and generate income as quickly as possible. This is especially true when jobs are scarce and the economy is struggling. In doing so, these individuals may overlook important provisions that could have negative consequences for them down the road.

One such provision is the “covenant not to compete.”

A covenant not to compete is a promise by an employee to its employer that continues beyond the time the employee has his or her job. Typical covenants not to compete prohibit the employee from seeking employment within either the same industry or within a certain geographic area.

If the employee breaches the promise not to compete with his or her then-former employer, the employer may seek monetary damages from the employee or an injunction preventing the employee from working in the industry or geographic area at issue.

If an employee’s contract is terminated, the employer will most likely seek to enforce the covenant not to compete. This may dishearten those of you seeking to obtain employment either around where you live or those who work in a specialized field.

If you find yourself burdened by debt and seek bankruptcy, it is possible to discharge the monetary portion of the non-compete provision as a claim. This would prevent your employer from seeking monetary damages if you were to find employment in violation of the covenant. (It may not, however, stop the employer from seeking injunctive relief.)

The lawyers at Bunch & Brock seek to help you obtain a fresh start. Part of that fresh start is finding a job in your field to generate income. If you are experiencing financial troubles, contact the lawyers at Bunch & Brock to discuss your options.