{"id":365,"date":"2020-08-03T20:13:37","date_gmt":"2020-08-04T00:13:37","guid":{"rendered":"http:\/\/www.new.waltercounsel.com\/blog\/?p=365"},"modified":"2020-09-24T16:13:39","modified_gmt":"2020-09-24T20:13:39","slug":"non-competes-sword-and-shield","status":"publish","type":"post","link":"https:\/\/waltercounsel.com\/?p=365","title":{"rendered":"Non-Competes: Sword and Shield"},"content":{"rendered":"\n

Restrictive covenants \u2013 agreements not to do certain things \u2013 are common in employment agreements. The most common: non-disclosure, non-solicitation, and non-competition.<\/p>\n\n\n\n

Let\u2019s talk about non-competition agreements or non-competes. Companies often ask employees to sign non-competes. Their basic purpose is to protect the employer when (inevitably?) the employee moves on to other (greener?) pastures, by limiting the employee\u2019s ability to compete with the company.<\/p>\n\n\n\n

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Non-competes are governed by state law. That is, each state gets to decide whether the contract terms of a non-compete (governed by its law) should be enforced. Some states are more favorable to companies; others to employees. Generally speaking, though, a non-compete will be enforced if it is (1) based upon valid consideration (see below), (2) necessary to protect the company\u2019s interests, and (3) is reasonable in geographic area and duration.<\/p>\n\n\n\n

[Digression: valid consideration, in most states, may be simply the employee getting a job.]<\/p>\n\n\n\n

It\u2019s imperative that a person who leaves a company either to join another company or start his own business review any employment agreement or non-competition agreement he has entered into. (And let\u2019s keep in mind that an agreement doesn\u2019t need to look like a contract to be binding. For example, an acceptance of an offer letter or an acknowledgment of a company policy manual can possibly bind an employee to a non-compete.) The non-compete, whether free standing or hidden in another document, may greatly restrict the ability of a person to perform in his new role.<\/p>\n\n\n\n

On the other hand, the owner of a company may want his employees to enter into non-competes. In many cases this is an entirely appropriate way to preserve the company\u2019s business from wandering ex-employees. However, the non-compete may not be proper or necessary for every employee. In addition, the non-compete may not be sufficient; it may need to be supplemented by a non-disclosure or non-solicitation agreement. And if a non-competition agreement is entered, a generic form will not necessarily be enough; the agreement needs to comply with the state law that governs it.<\/p>\n\n\n\n

The usual remedy for breach of a non-compete is an injunction, a court order preventing the ex-employee from engaging in this new role. Sometimes, monetary damages are awarded in addition or instead.<\/p>\n\n\n\n

Please let me know if you have any questions or comments.<\/p>\n\n\n\n

Alan N. Walter<\/p>\n","protected":false},"excerpt":{"rendered":"

Restrictive covenants \u2013 agreements not to do certain things \u2013 are common in employment agreements. The most common: non-disclosure, non-solicitation, and non-competition. Let\u2019s talk about non-competition agreements or non-competes. Companies often ask employees to sign non-competes. Their basic purpose is to protect the employer when (inevitably?) the employee moves on to other (greener?) pastures, by … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10,5],"tags":[24],"class_list":["post-365","post","type-post","status-publish","format-standard","hentry","category-contracts","category-employment","tag-restrictive-covenant"],"_links":{"self":[{"href":"https:\/\/waltercounsel.com\/index.php?rest_route=\/wp\/v2\/posts\/365","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/waltercounsel.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/waltercounsel.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/waltercounsel.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/waltercounsel.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=365"}],"version-history":[{"count":2,"href":"https:\/\/waltercounsel.com\/index.php?rest_route=\/wp\/v2\/posts\/365\/revisions"}],"predecessor-version":[{"id":573,"href":"https:\/\/waltercounsel.com\/index.php?rest_route=\/wp\/v2\/posts\/365\/revisions\/573"}],"wp:attachment":[{"href":"https:\/\/waltercounsel.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=365"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/waltercounsel.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=365"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/waltercounsel.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=365"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}