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The Scoop on Non-Compete Agreements

We’ve all done it before. You download a new software program and the next thing you know a small novel of legal jargon pops up on your screen. You could read the entire document and hope to stay awake while doing so, or you could just scroll down, check the box stating, “I have read and agree to the following terms,” and go on your merry way.  After all, what’s the harm of a little virtual white lie? We have become accustomed to scrolling past all the “legal mumbo jumbo,” believing there couldn’t be anything too important in all of those statements.

It can be tempting to apply that same attitude towards employment paperwork, but this is one area you should not “scroll” right through. Careful examination is especially important when it comes to a legal document that is becoming increasingly popular in the hiring process for engineers: The Non-Compete Clause (cue ominous music).  Many graduating students are unaware of this legal contract and may not fully understand the implications of signing a non-compete. Yet, have no fear! ECS is here to make sure you are fully knowledgeable about this legal matter and help you sort through a non-compete agreement.

The first thing you should know is that these contracts are fairly common for industries where knowledge is considered a commodity. This would definitely include engineering, especially design, consulting, and software development. Companies want to ensure that their ideas, products, and clients don’t transfer to a competitor through a previous employee. The employer’s reasoning for a non-compete agreement is certainly justifiable, yet not every non-compete is created equal. Here are two things to keep in mind:

State laws regarding non-compete contracts: For example, in California all bets are off. Non-compete agreements are illegal. But in New York, Florida, and – you guessed it – Ohio, non-competes are fair game. Every state is a little different, but all states impose some restrictions on non-competes to balance out employer and employee interests.  

Conditions of the agreement: For a non-compete clause to hold up in court, the company needs to prove the agreement is reasonable. This can include the clause duration, geographical radius, generality of the wording, and level of access an employee has to sensitive information or client base. A non-compete saying you cannot practice software-development anywhere ever is not something you should sign, or something that will hold up in court. Yet, a two year binding contract for the 30 mile radius surrounding the Columbus area could be a different story. Lastly, non-competes should only be enacted if the employee leaves the company willingly. You should hesitate signing an agreement that would be in effect even if you were terminated.

So when you find yourself flipping through page after page of health benefits, retirement plans, and tax information, you should think twice before signing every document your new company gives you. If presented with a non-compete agreement in your offer letter, take time to look it over before signing. Bring it into ECS and have an advisor peruse it as well. If the conditions seem reasonable to you, go ahead with the process. If not, this is a conversation you should have with your employer or ECS staff member before signing. Potentially, some of the more strict limitations could be adjusted, and you may save yourself quite a headache in future years. Yet, keep in mind that a non-compete is not something you should discuss with an employer until they bring it up or present you with a written agreement, otherwise you could come across as non-committal.

More questions about the hiring process? Check out previous blog posts or schedule an appointment with an ECS advisor. Happy job hunting!

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"There is no wealth like knowledge, and no poverty like ignorance."

Categories: Miscellaneous

About the author

Caleb Craft

Caleb Craft was a previous Graduate Administrative Associate at Engineering Career Services.