Non-Compete Agreements: When Are They NOT enforceable?
- Too long a time
- Too large a geographic territory
- Too broad a definition of secrets
- Failure to define protected confidential information
- No agreement at all
- Thinking “one size fits all” – the same agreement does not apply to all employees
- Choice of law points to the wrong state
- Trying to restrict all employees from working in their field
Preparing effective non-competition agreements is possible when an employee has access to confidential marketing and customer information. The agreement must be a limited in time and geographic area and does not unfairly restrict competition - allowing for protection of an “employer’s competitive business interests”.
A Judge enforced a non-compete agreement when an employee was prohibited contacting customers for 12 months and there was no geographic boundary at all! Mid-Michigan Medical Billing Service, Inc. v Williams
Here a Judge struck down a non-competition agreement when we demonstrated, at trial, that the employee took no confidential information and had a right to make a living selling insurance.
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