Are you being asked to sign a non-compete agreement by your employer? Did you already sign a contract with a non-compete provision? Either way, it is crucial that you have a full understanding of your rights and responsibilities. At Ace Law Group, we have extensive experience advocating for the rights and the interests of employees. In this article, our Las Vegas employment lawyer highlights key things to know about navigating non-compete agreements in Nevada.
What is a Non-Compete Agreement?
A non-compete agreement is a type of employment contract or a type of provision within an employment contract that restricts a worker’s ability to perform certain positions after leaving the company or organization. These agreements typically last for a specific period and within a certain geographic area and they limit the employee’s ability to work in competing businesses after leaving the company. Employers use non-compete agreements to protect their business interests—including proprietary information, trade secrets, and customer relationships.
Non-Compete Agreements are Enforceable in Nevada (If Requirements are Met)
By definition, a non-compete agreement is a restraint on trade. It is often referred to as a type of non-restrictive covenant. Nevada law looks skeptically at most restraints on trade. Still, non-compete agreements by employees are enforceable under Nevada law—as long as certain state requirements are met. Here are three requirements for a non-compete in Nevada:
- Reasonableness in Scope and Duration: The agreement must be reasonable in terms of the geographic area it covers and the duration for which it applies. In Nevada, non-compete agreements should not impose restrictions for more than a reasonable period. Most last for a year or less. However, one that lasts a couple of years may also be valid. Beyond the duration, geographic limitation must be appropriate to the interests the employer seeks to protect, such as the area where the company operates or has substantial business interests.
- Protect Legitimate Business Interests: Under Nevada law, a non-compete agreement must protect the legitimate business interest of the employer. Some common examples include major investments into employee training, the confidentiality of proprietary information, and the maintenance of customer relationships. The agreement should not merely aim to stifle competition or prevent the employee from pursuing a livelihood. Nevada courts will evaluate whether the interests claimed by the employer are valid.
- Overall Fairness: Nevada courts can strike down a non-compete agreement signed by a worker based solely because it is “unfair.” the agreement must be reasonable from a general fairness standpoint to both the employer and the employee. The non-compete should not create undue hardship on the employee in pursuing their career, nor should it be overly broad or vague in defining what constitutes competitive activity.
A Non-Compete Agreement Should Be Drafted and Reviewed By a Lawyer
You do not want to sign—or be held to—a non-compete agreement that is poorly drafted or that does not properly protect your rights and your interests. As an employee, it is crucial to have a non-compete agreement drafted and reviewed by a lawyer. Your Las Vegas attorney for employment contracts can help to ensure that the agreement is fair and does not impose unreasonable restrictions on your future employment opportunities. A lawyer can also help you negotiate for the most favorable possible terms.
Can I Get Out Of an Existing Non-Compete I Already Signed?
It depends. As noted, there are a number of different reasons under which a court in Nevada could throw out your non-compete agreement. It is possible your agreement is not enforceable. On the other hand, it may also be possible to negotiate an early release from the non-compete agreement with your current/former employer. Our Las Vegas employment lawyer can assess the enforceability of the agreement based on local laws and potentially identify any terms that could render the agreement invalid. We can help you determine the best course of action.
An Overview of Recent Legal Developments on Non-Compete Agreements
Non-compete agreements have been in the news recently. There has been a wide legislative and regulatory attempt to restrict the use of non-compete contracts by employers. In April of 2024, the Federal Trade Commission (FTC) actually announced a rule banning most private businesses from using non compete agreements nationwide. The move was designed to promote fair competition and enhance worker mobility by preventing employers from restricting employees’ ability to join or start competing businesses after leaving a job.
Initially, the ban was set to take effect in September of 2024. However, that did not occur. Several business interest groups sued the FTC to block the implementation of the non-compete ban. Their effort—at least to this point—has been successful. Shortly before the ban was set to take place, a federal court in Texas blocked the FTC’s regulation from becoming law. As of October 2024, the ban has not taken effect and is very unlikely to take effect in the near future. Our firm will closely monitor all future developments related to non-compete agreements.
How Our Las Vegas Non-Compete Agreement Lawyers Can Help
Do you have questions about a non-compete agreement? Whether you want to know about negotiations, review of a proposed contract, or enforceability of an existing agreement, we are here to help. At Ace Law Group, we have extensive experience with non-compete agreements and other employment contracts. Our firm has obtained successful verdicts and settlements for clients across a wide range of cases and we always put the rights and interests of employees first.
Contact Our Las Vegas Non-Compete Agreement Lawyers Today
At Ace Law Group, our Las Vegas non-compete agreement attorneys are skilled, experienced client advocates. We are committed to putting your rights and your interests first. If you have any questions about non-competes, we are here to help. Call us now or contact us online for a confidential initial consultation. From our office in Las Vegas, we help employees navigate the nuances of non-compete agreements in Clark County and throughout Nevada.