What Employees Need to Know About The Federal Trade Commission’s
New Non-Compete Rule
The non-compete lawyers at Garrison, Levin-Epstein, Fitzgerald & Pirrotti, P.C. have been fighting for the workplace rights of Connecticut employees for decades. Our law firm represents individuals from all walks of life – from corporate executives to hourly workers – in every aspect of employment law. This includes counseling employees about non-competes, both when they are thinking about signing them and when they are considering the scope and enforceability of non-competes they already signed.
If you are concerned about a non-competition agreement, speak with experienced Connecticut non-compete lawyers to understand your options.
What Is A Non-Compete?
Also known as a non-competition agreement or covenant not to compete, a non-compete is a contract between an employee and an employer that prohibits the employee from engaging in a business that competes with his or her current employer’s business.
An employee cannot be forced to sign a non-compete. However, refusal to sign a non-compete can in some circumstances lead to a job offer being rescinded or to termination of existing employment. Accordingly, employees need to be very helpful about how they handle the negotiation and signing of non-competes.
Non-competes should be distinguished from other types of restrictive covenants, such as non-solicitation (which prohibits a former employee from enticing their former colleagues from leaving that employee’s former employer) or non-service (which prohibits a former employee from providing services to customers of that employee’s former employer).
In general, non-compete agreements are one-sided; they exist only to protect the employer. Worse still, they can cause real problems for employees who are looking for new jobs. Consider this example:
Jeremy works for Company X, a software development company in New Haven. Before it would hire him, Company X required Jeremy to sign a non-compete agreement, in which he promised not to work for a competitor of Company X for two years. Thinking that he would have a secure job for years to come, Jeremy signed the agreement. But after a few months at Company X, Jeremy started to dislike the job, and he wanted to explore his professional options. After some searching, he received an offer from Company Y, which is a direct competitor of Company X. When Jeremy tried to leave Company X and join Company Y, Company X sued Jeremy, claiming that Jeremy’s work for Company Y violated his non-compete.
As you can see, non-competes by their very nature restrict the free movement of labor. They force employees to keep jobs they don’t want or risk losing their livelihoods altogether. That is why some states – most prominently California – have refused to recognize or enforce non-competes at all.
Connecticut Law and Non-Competes
According to Connecticut law, a non-compete is only enforceable against a former employee if it is “reasonable.” What is “reasonable” for a non-compete is determined through a five-part test. The parts are:
- The duration of the restriction. Generally speaking, longer restrictions are harder to enforce. But it is not unusual to find restrictions of a year or even longer, depending on the circumstances.
- The geographic area covered by the restriction. Generally speaking, the greater the area covered by the non-compete, the less likely it is to be found “reasonable” and thus enforceable. A non-compete that covers just New Haven is likely more reasonable than one that covers all of Connecticut.
- Whether the restriction prevents the former employee from pursuing his or her occupation and earning a living.
- Whether the protection afforded to the former employer is fair and justified under the circumstances.
- Whether the interest of the public is adversely affected by the restriction.
If a non-compete is unreasonable under any one of the five parts, then it is unenforceable in Connecticut. Non-competes, then, can be too broad to be “reasonable” and, therefore, enforceable, but they can also be enforceable in Connecticut if the courts find them to be “reasonable.”
This five-part, disjunctive test is developed on a case-by-case basis, meaning there are few if any bright line rules when it comes to Connecticut non-competes. The exception is non-competes affecting physicians. For medical doctors, according to a 2016 law (Public Act No. 16-95), non-competes may not last for more than one year and may not extend more than 15 miles from the “primary site where [the] physician practices.” In addition, non-competes restricting physicians are unenforceable if the employer terminates the physician without cause.
Need Legal Advice about a Non-Compete? Contact Garrison, Levin-Epstein, Fitzgerald & Pirrotti, P.C.
At Garrison, Levin-Epstein, Fitzgerald & Pirrotti, P.C., we deliver the experience and the knowledge that working people need for their toughest fights. We have challenged a variety of non-competes, winning victories in court and negotiating favorable resolutions for employees. If you need legal guidance about a Connecticut non-compete, contact our non-compete lawyers for a consultation.
