Non-compete agreements can be tricky, especially when you cross state lines. These contracts aim to protect businesses but can limit your job prospects. As an employee, you might wonder if moving to a new state frees you from these restrictions. The answer isn’t simple and depends on various factors. Let’s explore how non-compete agreements work across state borders and what you need to know.
Are non-compete agreements valid in every state?
Different states handle non-compete agreements in various ways. Some, like California, mostly ban them. Others, like Kentucky, allow them but with limits. Here are key points to remember:
- Kentucky follows the “blue pencil” rule for non competes
- Courts can change agreements that are too broad
- The agreement must protect a real business interest
- It should not cause too much hardship for the employee
Kentucky courts will enforce non-compete agreements if they are reasonable in scope, duration, and geographic area. However, they won’t uphold agreements that are too broad or limit an employee’s ability to earn a living.
How does moving to another state affect your non-compete?
When you move to a new state, your non-compete agreement doesn’t become void automatically. Courts often look at several factors which involve the state:
- Where you sign the contract
- You now work in
- Considered in the agreement’s choice of law provision
Kentucky courts usually respect the choice of law provisions in contracts. However, they may refuse to enforce an out-of-state non-compete if it goes against Kentucky’s public policy.
What should you consider before signing or challenging a non-compete?
Non-compete agreements can significantly affect your career choices. Before you sign or challenge one, think about the terms and scope of the agreement, your industry and job market, and the laws in your current and future states.
Each non-compete situation is unique. The enforceability of these agreements often depends on specific circumstances and state laws. An attorney who knows employment law in multiple states can guide you through the process involving your rights and options. They can review your agreement, explain how different state laws might apply, and guide you through potential challenges or negotiations.