Non-compete agreements are a fairly common tool used by Connecticut employers. They are a contract between an employee and an employer that specifically limit an employee’s ability to compete with the employer during or after employment. They generally prevent employees from competing in markets or professions that would be in direct competition with the employer. They’re very common for executive positions and in technical fields.
Just how routine are these agreements?
Two recent surveys estimate that between 16 to 18 percent of all U.S. workers are working under a non-compete agreement.
So, what does Connecticut allow in this area of the law? Here is a brief employer summary:
- Generally permissible as long as they are reasonable in geographical scope and duration and necessary to protect an employer’s legitimate business interests, and obtained with necessary consideration given to the employee (i.e., upon hire, with discretionary raise or bonus, etc.).
- Employers cannot require certain security guards to enter into an agreement preventing them from engaging in the same or similar job at the same location where they were employed, for another employer or as a self-employed person (unless the employer proves that the security guard obtained trade secrets).
- Employers cannot prevent broadcasters from being employed in a specific geographic area for a specific time period after their employment is terminated.
- Any contract or agreement that restricts the right of an individual to provide homemaker, companion or home health services in any geographic area of the state for any period of time or to any specific individual is void and unenforceable.
- The only circumstances when a covenant not to compete can be enforceable against a physician (defined as any individual licensed to practice medicine in Connecticut) if it is part of an employment agreement made in anticipation of, or as part of, a partnership or ownership agreement OR the employment or contractual relationship is terminated by the employer “for cause” (with “for cause” defined in advance in the written agreement between the parties). Further, a valid non-compete provision for a physician may only restrict the physician from competing for up to 12 months following termination in a geographical area within fifteen (15) miles of the “Primary Site” where the physician worked for the employer (with “Primary Site” defined as the office, facility or location where a majority of the revenue derived from the employee’s services was generated for the employer).
If you’re an employer and have questions about labor and employment law, including the proper handling of non-compete agreements, consider calling on the attorneys at Kainen, Escalera & McHale in Connecticut. We do one thing and one thing only – we are an employer defense law firm – in fact, we are one of the largest employer defense law firms in the region. What’s more, each of our attorneys has over 25 years of experience in employment law and labor law matters and can provide your business with comprehensive legal counsel ranging from assistance with necessary preventive measures to trial advocacy. Please contact us if we can help you.
Please Note: We do not represent employees. We only work with employers.
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