A noncompete agreement is a restrictive covenant that bars an employee from working for an employer’s competitors for a specific time period after employment is terminated, within a specific geographic area. This time period can range from months to years, depending on the circumstances and the nature of the industry. The geographic area can vary as well: from blocks to cities, to even greater geographic areas. Noncompete agreements usually include non-disclosure and non-solicitation agreements.
Noncompete agreements are meant to protect against unfair competition. Enforcement of these restrictive covenants depends on the following factors:
(1) whether the agreement protects legitimate business interests; (2) whether there is sufficient consideration;
(3) whether the restrictions are reasonable in terms of time and geography;
(4) whether the agreement imposes an unreasonable burden;
(5) whether there is a special relationship or transaction tied to the agreement; and
(6) whether it is bad public policy or injurious to the public