Non-Competition Enforcement and Defense

By: Skjold-Barthel

A covenant not to compete is a promise made by an employee not to compete with his or her employer for a specified period of time in a particular area. Also known as a non-competition agreement, or a no-compete, it can be as simple as a clause in a contract or it can stand as a separate legal document by itself.

This sort of employee limitation is enforceable by a court of law, especially if the employer has legitimate business interests to protect which will be improved by restrictions on former employees. Additionally, the limit on the employee’s right must be no greater than the employer’s necessity to guard their business interests. Examples of valid business interests which might require a non-compete clause include stopping an employee from taking advantage of trade secrets or information gained in the context of employment, which could disrupt a competitive edge of the former employer. Salespeople are often required to sign this sort of agreement, in order to stop them from using contacts and business relationships made in their new job. Another example of a non-compete signed by a salesperson may include agreeing not to sell or distribute the product or service in a particular region for a set amount of time.

Some courts view non-competition agreements with disfavor and will not enforce them unless the restrictions are very narrow and not too limiting on the employee. In other states, courts commonly uphold the power of this type of employment arrangement. If you need assistance with either the enforcement or defense of an employment non-compete agreement, the experienced Minneapolis Business Lawyers at Skjold Barthel can help you today at 612.746.2560.