2 ms·
It depends on your jurisdiction, mostly. In some jurisdictions, enforceable non compete requires extra-ordinary compensation, which has to be comparable to a b
by beagle3 9y ago
It depends on your jurisdiction, mostly.
In some jurisdictions, enforceable non compete requires extra-ordinary compensation, which has to be comparable to a base salary.
If the industry (and especially the company) gives almost everyone a bonus, then it is ordinary and thus not enough to make the non-compete agreement valid.
It was customary for employers to negotiate a reasonable salary, say $96K, and write it down in the employment contract that "you get a base salary of $48K/year, and an additional $48K/year is compensation for your 2-year non compete". Courts struck this down many times, since this wouldn't be extraordinary in the first place; and also, because if employee quit after 1 month, they would get $4K in compensation for a 2-year non compete, which is not remotely of the same order of magnitude as the income lost due to that non-compete.