In general, Indiana courts do not have a positive view of non-compete obligations. The employer bears the burden of proof, i.e. he must prove to the court that the agreement is enforceable. The court may declare a contract totally null and void or bind both parties to an amended version. Just as you are held responsible for what you sign, so is your employer. If your employer violates your employment contract – which also includes a non-compete agreement – the non-compete obligation may not be enforceable. By the way, make sure that every term you negotiate with your employer is written into your contract. Although verbal contracts are legally binding, they can be difficult to prove. Employers often argue that non-compete obligations are necessary to protect valuable secret sources of customers.
However, employers who claim to protect customers` valuable data and sources have the burden of proof. You must have evidence to prove that the information is not available to others in the industry. In cases where the allegedly „confidential“ information can be obtained by publicly available or otherwise non-exclusive means, it is unlikely that this part of the non-compete obligation will be found to be enforceable. For example, if a company`s business contacts are extracted from telephone directories, business directories, the Internet and other public sources, a court is not as likely to conclude that the non-compete obligation is enforceable. The State Supreme Court concluded, inter alia, that the agreement was unenforceable. On the one hand, it prohibited the employee from hiring an employee at any level of the first company to perform any type of work. These likely included office cleaners, truck drivers, and others. Its scope is too broad, the court said. All the company could do now was adopt better non-compete clauses in the future.
Depending on the language of your non-compete obligation, you may be able to challenge the relevance of the terms. For example, Indiana courts have held that non-compete obligations that restrict competitive activity for a period of two years after separation are appropriate. If your non-compete obligation is longer, you may have reason to challenge it. Similarly, if a non-compete obligation prevents an employee from doing business throughout the state, but the employer only does business in the Indianapolis area, there may be a reason to challenge it. On Friday, July 9, 2021, President Biden issued an executive order encouraging the Federal Trade Commission (the „FTC“) to prohibit or restrict employers` use of non-compete obligations. The FTC has yet to issue a statement or guidance on this new regulation, and there is no indication that existing non-compete obligations will be negated by future FTC rules. If you are unsure whether your non-compete obligation is enforceable, you should seek legal advice from an employment lawyer at HKM Employment Attorneys. Talk to us before pursuing a job opportunity that could be in violation of the agreement.
Furthermore, the agreement cannot infringe established public policy, such as. B, the creation of a monopoly on a workforce, the prevention of leaving a job or illegality in any way. Like many workers, you probably signed a non-compete agreement, although it could have had one of the different names like „Pact not to compete.“ The message is the same. You`ve probably agreed not to transfer your talent, data, insider knowledge, or relationships to another company competing with your new employer. Whether you`re curious about the applicability of a non-compete obligation or are ready to take legal action against your employer for any other misconduct, we`re here to help. Call to schedule a consultation or visit our Indianapolis law firm to learn more. If you are thinking of making a change for the first time, check with your employer to see if they would voluntarily fire you from the non-compete obligation. An employer cannot consider your new business as a threat to their business and therefore exempt you from the non-compete agreement.
In such cases, be sure to ask your employer to document each release in writing. Recently, these „non-compete obligations“ have been the subject of negative press and increasingly negative court decisions. Indiana might be ahead of the trend, as it has long had a tolerant but cool relationship with these contracts. And late last year, our Supreme Court again fired a company after declaring its non-compete clause unenforceable. Unfortunately, if your employer views your new career path as a competition, they can`t voluntarily reject you from the non-compete obligation. In such cases, you may have reason to challenge the performance of the non-compete obligation. As in most states, Indiana courts consider non-compete obligations to be primarily standards of reasonableness. When a company asks a court to bind a former employee to an agreement they signed, the court generally considers two relevance criteria. The Indiana courts will uphold appropriate non-compete obligations.
However, there are times when a non-compete obligation can and should be challenged by an employee who has left the company. As already mentioned, since customary law regulates non-compete obligations, there are no fixed rules for any of these factors. However, geographical and temporal restrictions are generally similar within a particular profession and place. For example, a dental practice in a rural town might have a new dentist signing a non-compete clause that includes a 5-year clause with a 20-mile radius that effectively prohibits that new dentist from leaving and opening their own practice in the same city. as opposed to an agreement for an office in a large metropolitan area that lists half a mile and three years. Basically, a non-compete obligation is a contract signed by an employee that prevents him from working for a competitor of his employer. Clearly, these types of agreements can significantly limit a person`s ability to earn a living if they separate from their current employer. However, Indiana employees should remember that they may still have options available even if they unknowingly sign non-compete clauses, especially if those agreements are deemed unenforceable by law. For a non-compete obligation to be enforceable under Indiana law, it must ultimately be reasonable. To prove relevance, an employer must be able to demonstrate two things, including: If there is a non-compete obligation in your separation agreement that is effectively enforceable, your employer can take legal action against you for breach of your contract. You can claim financial damages or, more commonly, an injunction. That is, if the court confirms the contract, the employee must leave his new employer and continue to follow the terms of the agreement.
To protect their proprietary information and protect good employees from theft, Indiana employers are increasingly requiring their employees to sign non-compete agreements. The non-competition clause gives employers a degree of certainty that an employee who has developed considerable skills and acquired valuable knowledge during the course of his or her employment will not leave or compete directly with the company. However, many non-compete obligations are severe and exaggerated, which significantly stifles a person`s ability to move freely within their profession and pursue potential career opportunities. As a result, such agreements are regularly challenged in court. But how do we determine whether a non-competition clause violates the rights of our workers? The main factors that affect the duration and geographic scope of Indiana`s non-compete obligations are 1) the current and potential area of activity of a company, and 2) the degree of specialization and knowledge required for the role. The courts of Indiana will not enforce a non-compete obligation unless its restrictions are reasonable in terms of time, activity and geographic area. These contracts are designed to protect confidential information or trade secrets from being shared with other companies. Often, the duration of the non-compete obligation extends beyond the period of employment, which can make it more difficult for the former employee to find a new job in his or her profession that would not constitute a breach of contract. A medical sales representative signed a non-compete agreement when he joined a medical device company.
He then hired a second medical device company as vice president, and then hired several employees from the first company. This violated their previous agreement with the employee. In a dispute concerning a non-compete obligation in Indiana, the onus is on the employer to prove that there has been a clear breach of its non-compete obligation. While it may seem that there are many ways for the employee to win in a non-compete obligation, the courts will generally maintain an appropriate contract, mainly because the employee legally agreed to the terms when signing the contract. .