Are there standard geographical restrictions on a non compete?
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Are there standard geographical restrictions on a non compete?
My non compete does not list a
specific or generic area. Am I able
to work for a like companie outside
of a specific area? Many companies
provide the same service but serve
different communities. For this
example, my HQ is 150 miles from my
home and my territory was a minimum
of 30 miles from my home. Could I
obtain another position with a like
service company as long as I do not
work the same territory?
Asked on September 13, 2017 under Employment Labor Law, Michigan
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
No, there are no standard geographic restrictions. If the agreement contains a reasonable one (e.g. 50 miles), it will be enforced. In the absence of a specific limitation in the agreement, a court, in enforcing it (e.g. if the employer tried to take action against you) would look to the "market": does the former employer market/sell to the same pool of customers as the new employer? If so, you would be within the area or zone of the noncompete. This varies by industry: for example, I used to work in a type of educational publishing that typically had one sales rep per state. A rep who signed a non-compete could be barred from working for another company selling similar books in that entire state, since the whole state is the relevant market or territory. On the other hand, hair saloons typically draw customers from only 5 - 10 miles (at most) away in most areas; a stylist who'd signed a non-compete would typically be fine working at a salon 15 or 20 miles away.
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