How to get out of a non-compete agreement

There are several routes out of a non-compete agreement. Generally speaking, you must either show that the terms of a non-compete are unenforceable or reach a release agreement with other parties.

The following are the most common ways to get out of a non-compete agreement:

• Determine that the terms of the contract do not in fact prevent you from a desired course of action. Often, former employees misread non-compete agreements and assume that they are bound by certain covenants when they are not.
• Recognize when a non-compete contradicts the law. If this is the case, courts cannot enforce the agreement.
• Negotiate a release agreement with the involved parties.
• Ignore the agreement. In some cases, this approach can be viable. However, there is always a risk that a former employer may bring a claim against you.

Let’s take a look at each of these points in a little more depth.

What is a non-compete agreement?

Non-compete agreements may be presented as individual clauses within a broader contract or as documents in their own right. It is common for employment contracts to include a non-compete clause.

Non-compete agreements protect individuals and organizations, usually employers, from competitive practices.

For example, an agreement may prevent an employee from setting up a new business or working for a competitor within a certain radius.

If one party breaches the terms of a non-compete agreement, they may have to pay damages or cease certain activities.

How to get out of a non-compete agreement

Use one of the following methods to circumvent the terms of a non-compete agreement.

1. Confirm that you are bound by the terms of the agreement

Double-check the agreement to make sure that the terms you have agreed to do actually prevent your intended course of action.

2. Check that the agreement does not contravene the law

The law in your jurisdiction supersedes anything you may have agreed to in a contract. It is not possible to enforce a set of terms that violates legislation. Terms must be reasonable and protect a legitimate business interest.

3. Negotiate a release

A release is an agreement in which all involved parties decide to revoke the terms of a non-compete.

4. Ignore the agreement

Ignoring an agreement can be a viable strategy. It is not uncommon for courts to refuse to enforce non-compete agreements.

If you are thinking about going down this route, seek out legal advice to help you make a balanced evaluation of the benefits and risks.

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