Legally Enforceable?
Yes, a non-compete is legally enforceable if it’s reasonable and mentioned “at the inception of the employment relationship.”[1][2][3]
An attorney is prohibited from entering into a non-compete that restricts their ability for them to practice law.[4]
Reasonableness is deemed necessary to protect the employer’s goodwill and whether the restrictions imposed on the employer exemplify more significant limitations than necessary. This must consider the duration and the areas where the employee is restricted.[5]
If a non-compete is not made part of an employment contract, separate consideration must be made to enforce the agreement.[6]
Continued employment alone is not sufficient consideration. It must include “substantial economic and professional benefits” which is described as:[7]
- Increased wages;
- Promotions;
- Guaranteed long-term employment;
- Professional development; or
- Access to information that otherwise would not have been provided.
Blue Penciling
Sources
- Safety Center Inc. v. Stier (2017)
- AutoUpLink Technologies, Inc., Appellant, vs. Lynn Clark Janson (2016)
- Sanborn Mfg. Co. v. Currie (1993)
- Professional Rules 5.6
- Bennett v. Storz Broadcasting Co. (1965)
- Modern Controls, Inc. v. Andreadakis (1978)
- Satellite Industries, Inc. v. David C. Keeling (1987)
- Alside, Inc. v. Larson (1974)
- Faust v. Parrott (1978)
- Yonak v. Hawker Well Works, Inc. (2015)