Mountains to Monuments: Changing Landscape Around Non-Compete Agreements Enforceability
Highlights
States continue to narrow the enforceability of non-compete agreements through various requirements, such as minimum salary thresholds and notice requirements
Other legislation has limited the length of enforceable restrictions – from two years to 12 months – with overbroad agreements becoming void
Employers must ensure they comply with these requirements, as states are also increasing penalties for overbroad agreements to include fines and imprisonment
Non-compete agreements can be used to protect employers that spend the time and resources to train employees, share unique business insights with them, or introduce them to their customers and suppliers. But many times courts find that employers exploit restrictive covenants when seeking to restrain trade of employees without legitimate business interests – i.e. a sandwich shop attempting to prevent minimum wage employees from working at other sandwich shops.
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