Before you sign that confidentiality or non-compete agreement…
August 29, 2017
You’ve made it through several rounds of interviews for the job you want, and now you’ve just received the call that the position is yours. Congratulations! However, before you accept the position, you’ll probably be asked to sign a fairly complex employment agreement. It’s no secret that many employment contracts are written heavily in favor of the employer, especially those prepared for entry and mid-level employees.
There are numerous aspects of an employment contract that may prove unfair to an employee, but for many workers it is more important to obtain a job than fight every term of a contract. While it is certainly important to wisely choose your battles as you enter a workplace, one aspect that many employees often overlook is the confidentiality or nondisclosure agreement in an employment contract.
Non-disclosure agreements (NDAs) and non-compete agreements (NCAs) are a standard component of many employment contracts, but that doesn’t mean that they are remotely fair or even legally enforceable. A shocking portion of employers ask employees to sign an agreement that far overreaches the bounds of what is reasonable, just because they can.
But, just because you get handed a contract doesn’t mean you have to sign it, and, in many cases, simply having an attorney review and revise a NDA or NCA can save you many headaches down the road.
Not all NDAs or NCAs are enforceable
In reality, many employers write NDAs and NCAs with wildly broad terms that may or may not hold up in court. In general, the broader an NDA or NCA, the less enforceability it retains.
One of the primary areas where employers regularly overstep their bounds lies in the scope of the agreement. While an employer may reasonably ask an employee to protect confidential business information or agree to not leave a position and go directly to a competitor, these requirements have limits.
For instance, if an employer operates in New Jersey, they cannot reasonably object to an employee leaving for a position with a similar employer in Tennessee. While the two employers may serve very similar demographics, they do not directly compete with each other because of the distance between the two employers locations.
Similarly, an employer may use terms “in perpetuity” or other legalese terms that stretch the reach of the agreement far longer than any reasonable agreement should last. While it may prove reasonable for an employee to abide by an NDA or NCA for two or three years after leaving an employer, such an agreement should not extend indefinitely. Some courts may even throw out agreements seeking enforceability for a period as long five or ten years.
Furthermore, an employer cannot require an employee to break the law, should an employee learn something illegal takes place within a company.
These are only some issues of scope that many agreements frequently stretch.
What are you getting in the agreement?
For an agreement like this to prevail in a court, it must generally offer the employee something in return. If you face NDAs or NCAs as a part of your employment contract when you come on board with an employer, that fair consideration is almost certainly the offer of employment.
However, if an employer attempts to get you to sign such an agreement after you already work for them, not as part of the introductory employment contract, they should usually offer the employee something additional in return for forfeiting further rights and freedoms.
If you have any concerns about contracts you consider signing, do not hesitate to reach out to an experienced employment law attorney who can help protect your career and your rights.