Employers often require employees to sign non-compete agreements as a condition of employment. Non-compete (restrictive covenant) agreements are designed to protect employers from facing a disadvantage from an employee leaving the company and then using its business strategies, client lists, technologies, or other information they claim as trade secrets, to compete against them in the marketplace. Non-competition agreements can prevent former employees from working for competitors and starting their own businesses. Non-compete agreements may prohibit an employee from competing against the employer or work for a competitor within a specific geographic area for a limited period of time. If the terms of a non-compete agreement are overly-broad, such terms are subject to modification by a court. Considerations include:
- The duration of the prohibitions;
- The geographic limitations involving the prohibitions;
- The scope of the prohibitions, e.g., the specific activities that are prohibited; and
- Whether the non-compete covenants were part of an otherwise-enforceable agreement.
Non-compete cases arise in several contexts. In some cases, former employers often file cases against former employees and their new employers alleging breach of non-competition covenants. These cases may involve a request for an injunction, and require that counsel obtain a rapid understanding of the underlying facts in preparation for a temporary injunction hearing. In other cases, former employees who have started their own business in competition with the former employer have received a threatening letter from a law firm demanding that the new business stop competing. In other cases, the former employer interferes with the business relationships of the new business formed by the former employees. An analysis of each situation will require a careful review of the non-compete contract to determine whether the covenant is likely enforceable, or whether it is possibly invalid or overbroad. Non-compete cases often involve mixed questions of facts and law.
The Katz Firm will dedicate the time and attention necessary to effectively and efficiently address your non-compete claim or defense. Contact the Katz Firm for a free no-obligation case evaluation.