In layman’s term, a non compete agreement can be defined as a type of contract, where an employee promises not to enter into any kind of competition with the employer after the employment period is done with. These contracts primarily deal with the protection of confidential information and an unfair playing field for the company. And information falling into the hands of a competitor or a market adversary. The validity of the contract depends on various factors and sometimes may come with certain incentives for the person signing the contract after his employment period is complete. Many people remain worried if they can be fired for not signing a non compete. Employees, consultants, agents, contractors, everyone may come under the purview of this clause.
Protection-
Protecting the company’s foothold in the market and protecting it from malicious intentions of the investors are the main causes of the emergence of this contract. Although, proper steps should be taken before both the parties enter into this contract to make sure. That it does not get lopsided at any point and is equally beneficial to both the parties considering the various factors which come into play. Like the geographical location and the duration of the agreement.
The legality of a non competes agreement differs greatly from one place to another. Although steadily gaining importance in various crucial fields like telecom, media and information technology among others, from the perspective of Indian Law. A non compete agreement is not at all binding and can be considered null and void in court.
Non-Disclosure Agreement
Another term that lies in the same ballpark as a non compete agreement is a Non Disclosure Agreement (NDA). A Non Disclosure Agreement is an agreement where two or more parties enter into an agreement to not disclose any of the information. That is passed between them during the course of the venture to protect the interests of the concerned parties. It is a legally binding document that allows the parties to freely share sensitive information between them.
Difference between a Non-Compete Agreement and a Non Disclosure Agreement
Although both the contracts are powerful legal instruments enforced to safeguard the integrity and privacy of the organization and employee alike. There are some subtle differences between a non compete agreement and a non-disclosure agreement.
In the non compete agreement, the recipient who is resigning or whose contract is being terminated enters into an agreement. To not compete with the party with whom they are signing the contract in adherence to certain factors like duration, incentives and field of business. It protects the company from unfair competition and thus levelling the playing field. One of its special characteristics is that it’s usually a one-way contract.
A non-disclosure agreement, on the other hand, restricts the independent employee, contractor and agent to share sensitive information. Like the company’s trade secrets to external parties. It is a mutual contract that cannot come into existence without the consent of both parties.
Although similar in nature, a non compete agreement and a non-disclosure agreement specifically perform a distinctly different function. Which leads to the protection of the interests of the parties.
Can I be fired for not signing a Non-Compete Agreement?
With the non compete agreement being a characteristically one-way contract. Employees after entering into a new workplace may deal with the dilemma of choosing between signing and non-signing a non compete agreement. Is its long term impact on his growth and progress of the company.
To summarize the facts of the matter, a non compete agreement is made in the best interest of the company to keep parties. Like the employees, contractors, agent, etc. from competing against the company itself in the long run after the resignation or the termination of their contracts.
Keep in Mind –
Keeping in mind the fact that an employer can neither force you nor you are in any way obligated to sign a non compete agreement. The decision is ultimately in the hands of the employer. He or she may choose not to hire you or pose the signing of the contract as an ultimatum towards your future in the business. The signing party also has the backing of the legality of the courts as a whole. Because the court does not really approve of a non compete agreement.
Upon dispute between the employer and the employee regarding matters of the contract. It will go over the contract to see whether the contract is practical and biased. And does not favour the employer in an unhealthy manner. With the premises of the contracts seemingly favouring the employer who holds the strings regarding hiring or promotion of the employee.
Like the geographical aspect of the contract. The contract is certainly not fair if signing a non compete agreement within the given geographical boundary. It will hamper the employee to make a living after resigning or getting terminated from the company. There are also aspects like duration and incentives where a specific duration for the adherence of the non compete agreement. It is given in the agreement itself and another one where, after the resignation/termination.
Certain incentives or bonuses are given to the employee to save. Or relieve him from any distress caused by not being able to function efficiently. To expand his new enterprise or not being able to find a livelihood. Due to the signing of the agreement in the last job respectively.
The Conclusion-
Can I be fired for not signing a non compete? This a general concern. Like in all legally binding contracts the above-mentioned points are some of the niches of the non compete agreement. Which the employee should pay keen and proper attention to before entering into or signing the agreement. Keeping in mind the different ramifications associated with the act in relation to his hiring, future in the company. And future employment opportunities in not only the same fields but also in other different fields.
