The effect of a non-compete clause does not change if you were laid off rather than quit or terminated for cause, but if it restricts you from getting a new job in your field, it may not be enforceable
I was laid off due to COVID-19. I had a non-competition clause in my employment contract. My only employable skill is in this field. Does the non-compete still apply if I was laid off?The effect of a non-compete clause does not change if you were laid off rather than quit or terminated for cause, so, to answer your specific question, yes, your non-compete clause applies even if you were laid off.
In most cases, if an employer includes a non-competition clause in an employment agreement, it will apply to any situation where employment has come to an end, including if employment has ended due to a permanent layoff, often described as a “without cause” termination. However, in some cases, the employment agreement will limit the non-competition clause so it only applies if the employee resigns.
In assessing whether a non-competition clause is enforceable, courts will ask: How long is the period of the non-compete, to what cities or regions does it apply, and what type of business activity does it prohibit? Assuming the clause has been drafted clearly and reasonably, the employer and employee should expect that the clause will apply post-employment.
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