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Avoid Legal Omission in Non-competition
Practical Law Legal Update 6-547-8705 (Approx. 3 pages)
Avoid Legal Omission in Non-competition
by Practical Law Labor & Employment
| Published on 05 Nov 2013 • USA (National/Federal) |
Resources to help employers and their counsel avoid liability associated with non-compete agreements.
Using non-compete agreements can help employers protect their business interests by minimizing the risk of unfair or unlawful competition by former employees. These kinds of restrictive covenants can preserve a company's competitive advantage, valuable trade secrets and other confidential information. However, most jurisdictions disfavor these restrictions, and courts that enforce non-compete agreements typically balance the legitimate business needs of the employer against the right of an employee to earn a living.
Gaining a full understanding of the risks and rewards of non-compete agreements requires knowledge of a variety of legal issues, including:
- Drafting considerations. Non-compete agreements must be drafted appropriately, accounting for issues ranging from consideration to non-solicitation. For information on drafting non-compete agreements, see:
- State law. State law must be factored into any assessment of enforceability in both drafting and litigating claims for violations of non-compete agreements. For information about state law on non-compete agreements, see State Q&A: Non-compete Laws.
- Litigation nuances. Litigation surrounding non-competes requires an understanding of evidence gathering, cease and desist letters, declaratory judgments, options to seek damages and injunctive relief. For information on litigating issues surrounding non-compete agreements, see Practice Note, Preparing for Non-compete Litigation.
- Hiring from a competitor. Bringing on employees from a competitor is common practice, but the existence of non-compete agreements presents significant risks that require special attention. To learn more about avoiding those risks, sign on to Practical Law's Hiring from a Competitor: Practical Tips to Minimize Litigation Risks webinar.