Law Library Articles
Top 10 Covenant Not to Compete Articles
The business world is cutthroat. Some companies go to great lengths to steal competitor’s secrets. Other companies try to entice top employees to leave their current employers. Also, employees often leave their current employer to go into business for themselves, using the knowledge and skill they acquired on the job.
Most companies require employees to sign a covenant not to compete. This prevents employees from working for another company or from starting a company of their own that is in direct competition with the original company.
The following is a list of the Top 10 articles from the LegalMatch Law Library that discuss the important details of covenants not to compete.
No employer wants his employees to leave his company and immediately go to work for a competition. In order to prevent other companies from luring away the shining stars of the company’s workforce, many employers require their employees to sign agreements to not compete against them. This article explains the basics of such agreements, as well as pointing out where restrictions might go too far.
Imagine if Kentucky Fried Chicken just handed out the exact recipe for making their fried chicken. Before long, competing businesses would open up and KFC would begin losing business. To cut back on the competition, KFC avoids making its recipes public. Like all franchise operations, it also requires its employers to sign a covenant not to compete.
Companies frequently have trade secrets that give them an edge over their competitors. Examples include Coca Cola’s secret recipe and Apple’s test models of the new iPhones. Unless a company’s employees are sworn to secrecy before being exposed to the trade secrets, a company runs the risk of having its trade secrets leaked to the rest of the business world. There are a number of different clauses that companies can put into the employment contracts that their employees sign to make them promise to not share trade secrets.
In California, if you want to leave one company and go to work for another company in the same exact position in the same town, your former employer cannot stop you by enforcing a covenant not to compete. That is not to say that every single covenant not to compete has been outlawed in the entire state. You should read this article if you want to learn more about which covenants not to compete are banned in California.
If a company has a legitimate interest that is being protected by the covenant, then a company can prevent a former employee from enjoying a better employment contract from a competitor.
Judges in New York generally do not like covenants not to compete because they restrict a person’s freedom to work for another company or for themselves. However, covenants not to compete serve other purposes such as protecting trade secrets that New York judges do see as important. Since there is no black letter law defining which kinds of covenants not to compete are valid in New York, it is important to read this article to ascertain whether a judge will approve of your covenant not to compete.
Virginia companies are highly invested in their employees and do not want competitors to easily acquire the services of their employees. In order to protect their investment in their employees, companies in Virginia regularly make individual employees sign covenant not to compete agreements. Since companies tend to be more sophisticated than their employees, the Supreme Court of Virginia has created a test, which is described in this article, to see if a company has unfairly taken advantage of its employees through an overbroad covenant not to compete.
Your former employer may still be able to control your business actions by dictating where and for whom you are allowed to work if you agreed to a covenant not to compete. Sometimes, these covenants restrict former employees to the point where they are unable to reasonably find new work. If this is the case, courts must step in to invalidate the non-compete covenant. This article can tell you all about the different aspects of what will make a covenant not to compete legal or illegal.
In Florida, judges don’t have to randomly guess as to whether a covenant not to compete is valid or not. Instead, the can actually consult state statues that present clear guidelines as to the legality of all kinds of covenants not to compete. The best way to make sure that your covenant not to compete meets the guidelines laid out in Florida statutes is to read this article.
Ohio loves covenants not to compete almost as much as it loves cheering on the Ohio State Buckeyes. Even if a covenant not to compete in Ohio seems to be illegal at first, Ohio judges are actively encouraged to merely cross out, or blue pencil, the overly oppressive parts to make the covenant not to compete legal. This article provides a general overview of which kinds covenants not to compete will be altered to be made legal, and which kinds will still be held to be illegal regardless of what alterations are made to them.