Complicating Factors In Noncompete Investigations

When an employee signs a non-compete agreement and then leaves for another job, it's natural for the original employer to want to ensure that the employee isn't violating the terms of the agreement. However, these investigations are not cut and dried. The non-compete and what the employee is doing now often fall into a gray area. Sometimes it's determined that the employee has breached the agreement and that the agreement can be enforced, but other times, it's not that easy because of a number of factors.

Crossing State Lines

If the employee has gone to work for a company based in another state, that could make enforcing your non-compete difficult, if not nearly impossible. California and Texas, for example, are very much on the side of the employee in these cases as non-competes are considered a form of restraint on the employee's ability to work freely. Many states do enforce non-competes (given additional qualifications), but if your investigation involves crossing state lines, don't be surprised if enforcement ability looks unsure.

Overreach and the Right to Earn a Living

Another issue is that noncompetes can sometimes overreach, badly. Telling an employee they can't work for a competitor in a job that's similar to what they do now for a few months after quitting your company is one thing. It's quite another to tell that employee they can't work in the same field ever again or that they need to get your permission to quit and your permission to join a specific company. Those last examples would be seen as excessive restraints on the employee's right to work and right to choose where they work. That sort of non-compete could be seen as excessively controlling of a former employee's life.


There are also many technicalities that could trip up enforcing your non-compete. Maybe you forgot to sign the agreement; it's a small thing but can void the agreement. Or, maybe you didn't really give an existing employee anything in return for their new agreement to not work for a competitor. (When you ask someone already working for you to sign a non-compete, you have to provide something in exchange, a process called consideration.)

None of this means that you should never investigate potential breaches of non-competes. These issues are ones you can address as you draw up new non-competes, and they are items that you should keep an eye out for when you do initiate an investigation. If you need help with a non-compete, contact a non-compete contract investigator