So you’re considering jumping ship and working for a new company – but what about that non-compete agreement you’ve signed? Perhaps you’ve been offered the perfect position as a resale coordinator, builder liaison, or broker. The role and location are precisely what you want for your career and your family. But there’s those nagging questions: is it worth the risk of legal hassle? Is your contract even enforceable? How should you proceed?
First of all, like all legal matters, there’s no way to know without consulting an attorney. So talk with an attorney who handles non-compete agreements and get legal advice before proceeding.
But as executive search consultants in the commercial real estate industry for many years, we know a thing or two about non-competes, too. And here are some important points you should know.
1. A non-compete agreement is a contract.
Don’t be flippant about violating a non-compete. It is a contract, and you can be held liable for its terms. Proceed with caution.
Besides, as a CRE professional with integrity, you want to be a man or woman of your word. Review the terms of the agreement and understand just what you may or may not do.
2. Non-competes are only enforceable if reasonable.
While “reasonable” is subjective and differs from state to state, generally, this kind of contract is only considered reasonable according to three criteria:
- The geographic location: the region should be less than 50 miles in most cases and not cross state lines.
- The time limitation: courts don’t usually find non-compete agreements to be reasonable if they exceed 12 months of restriction from the new start date.
- The scope of the role: the narrower the scope, the more enforceable the agreement. Selling to your company’s clients might be a violation, but merely working in the real estate industry is not.
3. It all depends on your state.
While most states tend to be lenient with employees, some states go so far as to consider a non-compete agreement as null and void. Fortunately, California is one of those states.
California employers may protect company secrets if they can prove they are proprietary, but competition is not restricted. If your employer is in California, you probably weren’t required to sign a non-compete to begin with. And if you were, it’s almost certainly unenforceable.
4. When in doubt, get help.
If you’re in an area where a non-compete agreement is legal, and you’re unsure about its reasonableness or enforceability, communication is key. Talk to your prospective employer before you defect, and show them the contract. They may be able to design your role in such a way to preclude a lawsuit or potential violation of the agreement.
Talk to your recruiter. Executive search firms are adept at handling objections like these and helping you avoid pitfalls – especially recruiters who specialize in CRE and know the employment rituals and rules for your industry front and back.
Navigating these troubling times can be treacherous, so go with a firm whose expertise you can trust and rely on. They can be your advocates and advisers through each step.