You signed a non-compete agreement with your employer. Now, you want to go to work somewhere else. What are your options?
Mississippi courts disfavor non-compete agreements. The courts prefer a free marketplace where people can change jobs and businesses can compete with each other. The courts will, however, enforce a non-compete agreement when it is reasonable in both its scope and duration.
A reasonable scope and duration vary depending upon the circumstances.
The term “scope” means two things.
The first is the geographic area described in the agreement. For example, “the entire state of Mississippi” describes a geographic area.
The second is the conduct the agreement prohibits, such as “anything to do with the insurance business.”
The term “duration” simply means how long the agreement remains in effect.
In Mississippi, non-competition agreements are only valid if the scope and duration are:
(i) reasonably necessary for the protection of the employer and
(ii) do not impose undue hardship on the employee.
This rule requires the court to perform a balancing test.
How can I determine if my non-compete agreement is valid?
There is no single test that determines the validity of the agreement. The following factors, however, will come into play:
- Courts are more likely to enforce agreements of short duration rather than long term.
- Employees who know confidential information about the employer’s business are more likely to be held to a non-compete agreement.
- Agreements with smaller geographic areas are easier to enforce.
- Employees who are lower down in the chain of command have a better chance of defeating a non-compete agreement than upper level management.
- The courts are very unlikely to enforce a non-compete agreement if the employee has been wrongfully or unfairly fired.
If you have a non-compete agreement and want to change jobs, contact one of our business Lawyers to review your contract before you make the change.
Pepper & Odom Law Firm
Ridgeland, MS 39157
Original Content by: Attorney Craig Panter of The Panter Law Firm