States With Pro-Employee Laws: Consideration For Noncompete Can't Be Continued Employment

Florida, like some other states, allow unscrupulous employers to present noncompete agreements to existing employees and say, "Sign or be fired." What does the employee get for agreeing not to work for a competitor for a year or two? Continued employment. That's it.

The effects of this can be pretty devastating. Say you left your job for a better opportunity. You start the new job and then, whammo! You have to agree not to work in your industry for 2 years, all your contacts belong to the new employer, and they can fire you a week after you sign. Fair? Heck no. Legal? Yes, in most states.

However, there are some states that just say no to allowing continued employment to be the sole consideration for a noncompete agreement. Last week I talked about some states that even require advance notice, prior to employment, of the noncompete. This week I'll talk about those states that don't allow employers to demand a signature without some real consideration.

Hawaii, Kentucky, Minnesota, Montana, New Hampshire, North Carolina, Oregon, Pennsylvania, South Carolina, Texas, Virginia, Washington, West Virginia, Wisconsin, Wyoming say that continued employment alone is not sufficient consideration for a noncompete or nonsolicitation agreement. In those states, employers must offer something extra, like specialized training, a promotion, a raise, a change to non-at-will status or other consideration for the noncompete or nonsolicitation agreement.

In Illinois, employees must be employed at least two years for continued employment to be valid consideration for a noncompete agreement.

There's a pending case in Wisconsin that will decide the issue. In Alaska the issue is still undecided.

As you can see, state law varies wildly (and it changes constantly). Talk to a lawyer who handles employee-side employment law in your state to find out whether or not your noncompete agreement is enforceable.

If your state is one of those that allows employers to walk in one day and demand a signature upon pain of firing, maybe it's time to talk to your state legislators about why they aren't protecting employees in your state.