Every state treats non-competes a little differently. Typically, the more a state considers itself an “at will” employment state, which frequently favors the employer, the more the state courts given the benefit to the employee in terms of how they interpret specific language, terms and limits on the structure of a non-compete clause.
For example, in some of the most conservative, at-will jurisdictions, judges often place the strictest limits on the time and distance parameters a non-compete may impose. This makes sense from the standpoint of freedom of movement in employment. If the employer is free to terminate the employee at any time, the employee should likewise be free to seek other employment as he chooses.
One item that generally remains within the scope of protection for the employer are active customer lists. Even this category is less broad than it was a generation ago, mostly due to the practical difficulties associated with protecting customer lists in an era of technology and widespread hacking. But it is possible, especially where an emplyer has carefully and properly identified active customers.
Even broader protections apply for trade secrets. However, you cannot protect trade secrets unless and until you have complied with state and federal laws, typically under the Uniform Trade Secrets Act.
For employers, non-compete issues with employees typically come down to the ability to protect a territory and propsect cultivation within a territory. Thus, the employer does not want to see an employee leave and go to work for a competing company selling a similar product that could hurt business. The strategy that is generally most effective is to be very aggressive in asserting enforcement rights on the front end of an employee departure, and to hope the employee decides and obtains employment in a non-competitive position.
If this does not deter the employee, however, the business owner needs a well drafted agreement in place to have a chance of prevailing against the employee. The task thereafter is to buld a case against the employee’s actions based on the agreement itself.
For the employee, the strategy becomes quite different. Whereas there are many circumstances where an employer may hold a strong hand based entirely on the terms of employment, when it comes to a non-compete that just is not the case. The employee is usually best served to argue legal precedents from among the many cases where courts have ruled in the clients’ favor.
If you need assistance, drafting, negotiating or litigating a non-compete agreement, please call us today at 317-564-4976. With years of legal experience dealing these issues in cases involving non-competes, we can help.