HR Support on Noncompete Agreements

Editor's Note: Use noncompete agreements and stay ahead of the competition.

Melissa A. SilverOverview: One type of employment contract is the noncompete agreement. A noncompete agreement prevents an employee from pursuing a similar profession or trade in competition against the employer (usually post-employment). Noncompetition agreements are used to discourage an employee from working for a competitor using the specialized knowledge, skills, or confidential information gained while working for the employer.

The majority of the states recognize and enforce various forms of noncompete agreements. Generally, the terms of a noncompete agreement will only be enforced to the extent necessary to protect the employer's legitimate business interests. Most states will enforce a noncompete agreement if contains reasonable limitations as to the geographical area and time period in which an employee may not compete with the employer.

Trends: A few states have enacted legislation requiring employers to provide employees with a copy of the noncompete agreement prior to or concurrent with making an employment offer or an offer of change of job classification. If an employer does not comply, the agreement may be unenforceable, exposing an employer to unwanted competition.

Author: Melissa A. Silver, JD, Legal Editor

Latest items in Noncompete Agreements

  • Employee Discipline: New York

    Type:
    Employment Law Manual

    In-depth review of the spectrum of New York employment law requirements HR must follow with respect to employee discipline.

  • Illinois: Persuasive Ruling When Drafting and Enforcing Noncompete Agreements

    Date:
    10 March 2014
    Type:
    Editor's Choice

    A discussion of a court's ruling that 15 months is long enough for an employee to be bound by a noncompete agreement has been added to the Employment Law Manual.

  • Illinois District Court Rules 15 Months of Employment Was Sufficient 'Consideration' to Support Noncompete Agreement

    Date:
    13 February 2014
    Type:
    News

    The Northern District of Illinois has rejected the Illinois appellate court's holding in Fifield v. Premier Dealer Servs. and ruled that an employee's15 months of employment was sufficient consideration to support a noncompete agreement.

  • Multistate Employer

    Type:
    Employment Law Manual

    Multistate employers face the challenge of complying with not only federal laws, but also differing state and local laws. This section highlights some of the states' differences in terms of preemployment testing and background checks, noncompetition and nonsolicitation agreements, and discrimination, pay and leave rules.

  • Arizona Content Updated to Reflect Restrictive Covenant Ruling

    Date:
    13 November 2013
    Type:
    Editor's Choice

    The Arizona Terms of Employment section of the Employment Law Manual has been updated to include discussion of an Arizona appellate court ruling in Orca Communications Unlimited, LLC v. Noder, 2013 Ariz. App. LEXIS 221 (Ariz. Ct. App. Oct. 17, 2013).

  • Two-Year Minimum for Restrictive Covenants Still Stands in Illinois

    Date:
    18 October 2013
    Type:
    News

    Restrictive covenants will continue to be enforceable in Illinois only when the employee is employed for at least two continuous years, after the Illinois Supreme Court declined to review a case challenging this standard.

  • Virginia Content Updated to Reflect Recent Noncompete Ruling

    Date:
    04 October 2013
    Type:
    Editor's Choice

    The Virginia Terms of Employment, Employee Communications and Employee Discipline sections of the Employment Law Manual have been updated to include a discussion of the Virginia Supreme Court decision in Assurance Data, Inc. v. Malyevac, 2013 Va. LEXIS 103 (Sup. Ct. Va. September 12, 2013).

  • Terms of Employment: Virginia

    Type:
    Employment Law Manual

    In-depth review of the spectrum of Virginia employment law requirements HR must follow with respect to terms of employment.

  • Massachusetts Governor Supports Elimination of Noncompetition Agreements

    Date:
    25 September 2013
    Type:
    News

    In pursuit of economic development, innovation and entrepreneurship, Governor Deval Patrick's administration has declared its support for the elimination of noncompete agreements and the adoption of the Uniform Trade Secrets Act.

  • Employee Discipline: Delaware

    Type:
    Employment Law Manual

    In-depth review of the spectrum of Delaware employment law requirements HR must follow with respect to employee discipline.

About this topic

Guidance for HR on the use of noncompete agreements to prevent employees from competing with the employer.