GREAT ARTICLE ON NON COMPETES ACROSS THE US
Here is a firm that clearly represents Employers – but their article is great. A good reminder that every state is different and every contract will be treated individually. Read it in full here
Firm of Obermayer Rebmann Maxwell & Hippel, Joseph Centeno and Terri Gillespie
15 October 2008
Many companies utilize non-compete agreements in order to prevent their employees from working for a competitor while they are still working for the company, or for a period of time after leaving that employment. Because courts often look with disfavor on non-compete agreements, it is important that companies carefully draft these agreements in order to ensure their enforceability. The law governing the enforceability of covenants not to compete varies from state to state. Therefore, in order to increase the chances that a non-compete agreement will be enforced, you must be sure to plan ahead, draft the agreement with specificity and be certain that the agreement is supported by adequate consideration.
II. PLAN AHEAD
Proper planning is the first step in creating an enforceable covenant not to compete. Courts are more likely to enforce non-compete agreements that are tailored to the company’s specific needs. Therefore, before drafting a non-compete agreement, you must identify the interests that your company seeks to protect through the non-compete agreements. The planning process also must include a review of the applicable state law in order to ensure that the agreement will be held enforceable by the courts of that state.
A. Identify the Objectives of the Non-Compete Agreement
B. Be Aware of the Applicable State Law
III. DRAFT WITH SPECIFICITY
Determining whether a non-compete is reasonable requires a balancing of the employer’s interests against the interests of the employee and the public, in order to ensure that the restraint is neither overly harsh nor oppressive to the employee, and does not cause injury to the public. Determination of the reasonableness of a non-compete agreement also requires an analysis of whether the restraint is no greater than necessary to protect the company’s legitimate interests.
Generally speaking, over-broad non-compete agreements that prohibit an employee from performing any work for a competitor will not be enforced. In order to be enforceable, the non-compete agreement must be narrowly tailored and no more restrictive than is necessary to protect the company’s legitimate business interests.
Specific Questions relating to this article should be addressed directly to the author.