Updated February 29, 2024
A Kentucky non-compete agreement restricts a person’s ability to work in a specific business industry for a duration and geographical area. Continued employment is not sufficient consideration for a non-compete to be valid. The parameters of a non-compete must be reasonable to afford fair protection of the employer without imposing undue hardship on the individual.
Laws
Legally Enforceable?
Yes, it is legally enforceable in Kentucky if there is consideration made as part of the non-compete.
Continued employment is not considered sufficient consideration.[1]
Attorneys (prohibited)
An attorney cannot enter into a non-compete or sign any agreement with a covenant that restricts them from practicing law.[2]
Continued Employment
The continued employment of an employee, alone, is not determined to be sufficient consideration. The employer must include:[1]
- Monetary payment;
- Promotion; or
- Other benefits or entitlements.
Maximum Term
Five (5) years has been determined to be a reasonable timeframe in Kentucky.[3]
Geographic Area
Kentucky allows for a wide-ranging geographic area for non-competes. The Kentucky Court of Appeals allowed a nationwide ban for 2 years on an individual.[4]
Reasonable
In determining what is reasonable, the Court of Appeals has ruled:
“The restriction is such only as to afford fair protection to the interests of the covenantee and is not so large as to interfere with the public interests or impose undue hardship on the party restricted.[5]“
Blue Pencil
A Kentucky court has stated, “we are empowered to reform or amend restrictions in a non-compete clause if the initial restrictions are overly broad or burdensome.”[6]