Non-Competes in the COVID-19 Era

May 18 2020

Many employers require their employees to sign non-compete agreements, either upon hiring or during the course of employment.  A non-compete agreement – for those who are unfamiliar – is a contract that prohibits an employee from competing with his or her current employer’s business.

Sometimes non-competes are so restrictive that they are not enforceable.  Whether you are being asked to sign a non-compete or are trying to determine the importance of one you already signed, figuring out whether your non-compete is “reasonable” (and therefore enforceable) is tricky.

As with so many other aspects of the employer-employee relationship, COVID-19 has potentially thrown a wrench into the analysis of non-competes.

If you signed a non-compete agreement with your current or former employer before the COVID-19 pandemic, you may be wondering how COVID-19 will impact your ability to accept a new job offer.  A general principle of contract law may help.  This principle says, in essence: “If fulfilling your contractual promises is impossible or impracticable because of unexpected circumstances that occurred after the contract was formed and that were not considered by the contracting parties, then you may be excused from performance.”

As applied to a non-compete during the COVID-19 pandemic, the impossibility and impracticability doctrines mean that your restriction against competing with your current or former employer may not be enforceable because you could not have foreseen a global pandemic that has resulted in massive job loss and company closures.  In other words, because of COVID-19, you may be able to work anywhere without restriction because it would be unreasonable for you to obey the non-compete restrictions.  Or at least that may be an argument worth exploring with an experienced employment lawyer.

Non-competes may raise questions or concerns in other ways.  You might ask: “Does my non-compete apply if I am furloughed and want to look for another job?”  Or: “What happens if I found new employment but am required to sign a non-compete?  It’s really broad, and I’m concerned I won’t be able to get another job because COVID-19 will last for a long time.”  You also may be wondering about the specifics of the non-compete – for example, how a geographic restriction dovetails with telecommuting and other work done remotely.

These are all valid considerations that require discussion with an attorney.  At Garrison, Levin-Epstein, Fitzgerald & Pirrotti, P.C., we have long been recognized as a preeminent Connecticut law firm for workers, including employees with questions or concerns about non-compete agreements.

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