Reasonableness in the enforceability of a non-competition agreement

On Behalf of | Jan 13, 2021 | Employment Disputes

Non-competition agreements, often called non-competes, are important to the success of businesses throughout Denver and the rest of the United States. At their core, non-competes prevent employees from taking information, plans, or other information to different jobs and using it to the detriment of their prior employers. An employer may require a worker to sign a non-compete when they are hired to curtail any possible losses of proprietary information.

However, not all non-competition agreements are ironclad or even enforceable. When a non-complete is unreasonable, a worker may have options to have its scope limited or the entire contract set aside. This post does not provide legal advice but offers a brief discussion of how reasonableness can impact the enforceability of a non-competition agreement.

Scope and non-competition agreements

One factor that can be reviewed in terms of reasonableness in a non-competition agreement is scope. Scope is the distance from the employer where the employee may be barred from working in the same or a similar industry by the non-compete. For example, a non-compete may bar a worker from taking a similar position with their employer’s competitor within the same city that they worked for the original employer. A court can limit a non-competition agreement’s scope if it is too broad.

Duration and non-competition agreements

Like scope, duration is a factor that can be assessed in terms of reasonableness in a non-competition agreement. A non-compete should only last as long as needed to protect the sensitive or proprietary information of the employer. Once the need to protect business secrets or other data has ended, an employee should not be bound to the terms of an unreasonable non-compete.

Though they have important purposes, non-competition agreements are not always enforceable due to deficiencies in their scope and duration terms. An employment law attorney can help an individual understand the language of proposed non-competes and advise them of how best to proceed.

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