A non-compete agreement is a legal contract that restricts an employee from entering into competition with his or her employer after the employment period is over. Employers require employees to sign non-compete agreements for a variety of reasons, including protection of customer bases, intellectual property, trade secrets, design or manufacturing processes and other proprietary information.

A non-compete can give a company a great deal of power over a former employee. It prevents that worker from getting a job in the same field for a set length of time and within a defined geographic area. Because such contracts can interfere with the employee’s ability to carry on their livelihood, they are subjected to heavy scrutiny by the courts. In Connecticut, if a non-compete agreement is found to be unreasonable, it will not be enforced.

To determine whether a non-compete agreement is reasonable, Connecticut courts may consider the following factors:

1. The former employer’s legitimate business interest — The agreement must be tailored to address a particular interest that the former employer wishes to protect. This could include trade secrets, customer relationships and goodwill.
2. The geographical scope of the restriction — The restricted area must be no broader than necessary to protect the employer's legitimate business interests. For example, a non-compete agreement that restricts an employee from working within the same city or county might be reasonable, but not that bans employment anywhere in the state.
3. The duration of the restriction — The non-compete term cannot be longer than necessary to protect the employer's legitimate business interests. For example, a non-compete that restricts an employee for more than one year from working for a competitor is likely to be found unreasonable absent extraordinary circumstances.
4. The employee's former position — The employee’s job must have been at a sufficient level of management and/or expertise, or was one that commanded access to proprietary information, such that joining a competitor could hurt the former employer’s market position.
5. Consideration given to the employee — The employee must have received something of value in exchange for signing the non-compete. This could include enhanced severance pay or perhaps a continuation of salary during the period that the non-compete is in place.

Courts may consider other factors that relate to the fairness and justification of the non-compete and its effect on the former employee’s ability to find comparable employment in his or her field. The employee's age, health, education and ability to relocate may be considered.

Connecticut law governing non-compete agreements is not yet controlled by statute, despite legislative efforts to enact one. Disputes over enforceability are resolved on a case-by-case basis. An experienced Connecticut employment attorney can advise you about whether a non-compete agreement you are being asked to signed is likely to be enforceable.

Gesmonde, Pietrosimone & Sgrignari, L.L.C. represents employees in the full range of Connecticut employment law matters. To set up a meeting with one our attorneys in East Haven or Hamden, please call 203-745-0942 or contact us online.