Raleigh Business Lawyer for Individuals & Businesses
Non-Compete Clause & Non-Compete Agreement
We assist clients in drafting and analyzing the non-compete clause and non-compete agreements. Generally, every situation is unique between the employee and employer. Drafting an enforceable non-compete, or analyzing the viability of an existing non-compete is essential- especially considering how much is at stake- either protecting the employer’s business, or allowing the employee to continue employment elsewhere. Don’t wait for litigation, review your non-compete clause and non-compete agreements before there is an issue.
In North Carolina, a restrictive covenant is valid and enforceable if it is:
in writing entered into at the time and as a part of the original contract of employment
based on a valuable consideration
reasonable both as to the time and territory
designed to protect a legitimate business interest of the employer
not against public policy.
In determining whether restrictions on competition are reasonable, North Carolina courts balance the following factors:
the area, or scope, of the restriction the area assigned to employee
the area in which the employee actually worked or was subject to work
the area in which the employer operated
the nature of the business involved
the nature of the employee’s duty and his knowledge of the employer’s business operation.
Because this is a balancing test, the analysis of whether the agreement is enforceable will vary case by case. A long time period may be enforceable where the geographic scope is very limited, and the definition of competition is very limited (and vice versa).
If the non-competition agreement for an employee is found by a court to be unenforceable, the employer may successfully prevent the employee from working in their industry for a reasonable time. If the agreement is unenforceable, the employer may be left with little to no protection from the employee aggressively competing with the business.
If you have any questions about your non-compete agreements, please contact North Raleigh Law to arrange a consultation.