Is my non-competition agreement enforceable?

On Behalf of | Jul 17, 2021 | Business Law

A non-competition agreement is a very unique contract between an employer and employee. The reason why it is unique is because a non-competition agreement does not come into effect until after one of the parties terminates the employer-employee relationship.

However, the courts must see your non-competition agreement as reasonable in order to enforce what it says. According to FindLaw, a non-competition agreement must be reasonable in both scope and duration for the courts to enforce it.

Scope: is it reasonable?

If a non-competition agreement is reasonable in scope, this means that the court sees the geographic area it covers as reasonable. One of the purposes of a non-competition agreement is to stop former employees from opening up competing businesses across the street.

It is likely that your immediate geographic locale is a reasonable scope for your non-competition agreement. However, you cannot forbid a former employee from opening up a ‘competing’ business in an area that you have no presence in.

Duration: is it reasonable?

It is almost a certainty that you will not be able to use a non-competition agreement to swear a former employee to secrecy forever. It is also unlikely that information will hold its value forever.  In order for a court to find that your non-competition agreement is reasonable regarding duration, you must understand for how long certain pieces of information are valuable to your company.

In the event that the courts believe that your non-competition agreement is too broad, the courts may narrow the scope and duration of your agreement with no say from you. There is also the potential of the court refusing to enforce the non-competition agreement at all.