When advising clients and drafting employment contracts with non-compete clauses, there are several things every lawyer should keep in mind. The general rule is courts will enforce non-compete clauses to the extent they are reasonably necessary to protect legitimate business interests.[1] In North Carolina, they must be (1) in writing and (2) signed by the parties.[2] The following seven tips will strengthen a typical non-compete agreement and increase its likelihood of enforceability in a court of law: 1. Know Your State’s Disclosure Requirements Some, but not all, states require employers to disclose the existence of a non-compete clause…
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NCBC: Fifty-Mile Customer Based Geographic Restriction Makes Non-Compete Agreement Unreasonable
In August, the North Carolina Business Court (“NCBC”) determined a non-compete agreement was unreasonable because of its overly broad geographic restriction, and denied Plaintiff’s motion for preliminary injunction to prohibit a former employee from competing with it.[1] In North Carolina, non-compete agreements are generally disfavored and strictly construed against the drafting party. A non-compete agreement must be (1) in writing; (2) made a part of the employment contract; (3) supported by consideration; (4) reasonable both as to time and territory; and (5) no broader than necessary to protect the employer’s interest.[2] In determining the reasonableness of such agreements, the…
