Non-compete clause

In contract law, a non-compete clause (often NCC), or covenant not to compete (CNC), is a clause under which one party (usually an employee) agrees not to enter into or start a similar profession or trade in competition against another party (usually the employer). Some courts refer to these as "restrictive covenants." As a contract provision, a CNC is bound by traditional contract requirements including the consideration doctrine.

The use of such clauses is premised on the possibility that upon their termination or resignation, an employee might begin working for a competitor or starting a business, and gain competitive advantage by exploiting confidential information about their former employer's operations or trade secrets, or sensitive information such as customer/client lists, business practices, upcoming products, and marketing plans.

However, an over-broad CNC may prevent an employee from working elsewhere at all. English common law originally held any such constraint to be unenforceable under the public policy doctrine.[1] Contemporary case law permits exceptions, but generally will only enforce CNCs to the extent necessary to protect the employer. Most jurisdictions in which such contracts have been examined by the courts have deemed CNCs to be legally binding so long as the clause contains reasonable limitations as to the geographical area and time period in which an employee of a company may not compete.[2]

The extent to which non-compete clauses are legally allowed varies per jurisdiction. For example, the state of California in the United States invalidates non-compete-clauses for all but equity stakeholders in the sale of business interests.[3]

History

As far back as Dyer's Case in 1414, English common law chose not to enforce non-compete agreements because of their nature as restraints on trade.[4] That ban remained unchanged until 1621, when a restriction that was limited to a specific geographic location was found to be an enforceable exception to the previously absolute rule. Almost a hundred years later, the exception became the rule with the 1711 watershed case of Mitchel v Reynolds[5] which established the modern framework for the analysis of the enforceability of non-compete agreements.[6]

United States

The majority of U.S. states recognize and enforce various forms of non-compete agreements. A few states, such as California, Montana, North Dakota, and Oklahoma, totally ban non-compete agreements for employees, or prohibit all non-compete agreements except in limited circumstances.[7] For this reason, non-compete agreements have been popular among companies with employees working in states where they are allowed.[8] They are very common among commercial radio stations and television stations, especially for radio personalities and television personalities working for media conglomerates. For example, if a radio or television personality quits, is laid off or fired from one station in the media market they work in, they cannot work for another competing station in the same market until their contract expires with their former employing station.[9]

As of 2018, non-compete clauses cover 18 percent of United States workers, and this is down from 38 percent of workers. While more prevalent among higher-wage workers, non-competes covered 14 percent of workers without college degrees in 2018.[10]

California

Non-compete agreements are automatically void as a matter of law in California, except for a small set of specific situations expressly authorized by statute.[11] They were outlawed by the original California Civil Code in 1872 (Civ. Code, former § 1673)[12], under the influence of the American legal scholar David Dudley Field II.[13]

Out of state agreements are not enforceable

A leading court decision discussing the conflict between California law and the laws of other states is the 1998 decision Application Group, Inc. v. Hunter Group, Inc.[14] In Hunter, a Maryland company required that its Maryland-based employee agree to a one-year non-compete agreement. The contract stated that it was governed by and to be construed according to Maryland law. A Maryland employee then left to work for a competitor in California. When the new California employer sued in California state court to invalidate the covenant not to compete, the California court agreed and ruled that the non-compete provision was invalid and not enforceable in California. Business and Professions Code Section 16600 reflects a “strong public policy of the State of California” and the state has a strong interest in applying its law and protecting its businesses so that they can hire the employees of their choosing. California law is thus applicable to non-California employees seeking employment in California.

Whether California courts are required by the Full Faith and Credit Clause of the United States Constitution to enforce equitable judgments from courts of other states, having personal jurisdiction over the defendant, that enjoin competition or are contrary to important public interests in California is an issue that has not yet been decided.[15]

Exceptions — valid non-compete agreements in California

There are limited situations where a reasonable non-compete agreement may be valid in California.

  1. Where the owner of a business is selling the entire business, or is selling the goodwill in the business, the seller may be bound by a non-compete clause.[16]
  2. When there is a dissolution or disassociation of a partnership.[17]
  3. Where there is a dissolution of a limited liability company.[18]

Florida

The enforceability of non-compete agreements in the state of Florida is quite common. Some law firms build their law practice around these agreements and represent employees, employers and potential new employers of an employee currently bound by a non-compete agreement. The agreement is not allowed to be overly broad and generally difficult to enforce if it is for more than two years.[19] However, Florida courts will rarely refuse to enforce a non-compete agreement due to its length or geographic scope. Instead, under Florida law, courts are required to "blue pencil" an impermissibly broad or lengthy non-compete agreement to make it reasonable within the limits of Fla. Stat. § 542.335.[20] Also if the agreement is part of a general employment contract then there is the possibility of a prior breach by an employer. This may cause the non-compete clause of the contract to become unenforceable. However, recent case law from Florida's appellate courts has eroded the utility of the prior breach defense.[21]

Hawaii

A new law bars high-tech companies, but only such companies, in Hawaii from requiring their employees to enter into “non-compete” and “non-solicit” agreements as a condition of employment. The new law, Act 158, went into effect on July 1, 2015.[22]

Illinois

Noncompete agreements will be enforced in Illinois if the agreement is ancillary to a valid relationship (employment, sale of a business, etc.) and (1) must be no greater in scope than is required to protect a legitimate business interest of the employer, (2) must not impose an undue hardship on the employee, and (3) cannot be injurious to the public.[23] While reasonable geographic and temporal limitations on the noncompete agreement are not expressly required by governing law, they tend to be examined as a measure of whether the scope of the noncompete is greater than is required to protect a legitimate business interest of the employer.[24]

Unlike other jurisdictions, which follow the general rule that consideration is only important as to whether it exists and not as to whether it is adequate, Illinois will inquire into the adequacy of consideration.[25] The majority of courts will require at least two years of continued at-will employment to support a noncompete agreement (or any other type of restrictive covenant). However, in certain cases involving particularly sharp conduct by an employee, courts have required less.

While Illinois courts state the rule above, logically the analytical steps should be in reverse order—because inadequate consideration is fatal to the claim. Thus, under McInnis v. OAG Motorcycle Ventures, Inc.[26] there are three requirements in order for a post employment restrictive covenant limiting a former employee’s right to work for a competitor to be enforceable under Illinois law: (1) it must be ancillary to a valid contract; (2) it must be supported by adequate consideration; and (3) it must be reasonable, considering whether it: (a) is no greater than is required for the protection of a legitimate business interest of the employer, (b) does not impose undue hardship on the employee, and (c) is not injurious to the public. The McInnis decision interpreted the Fifield decision, above, to mandate two years’ employment in order for consideration to be adequate.

Starting in 2017, Illinois banned noncompete clauses against employees earning less than $13 per hour.[27][28]

Massachusetts

Noncompete agreements will be enforced in Massachusetts in appropriate circumstances.[29]

Historical context

By 1837, Massachusetts had indisputably adopted the analysis established in Mitchel.[30] In 1922, the Supreme Judicial Court eliminated any doubt that restrictive covenants in the employment context would be enforced when reasonable.[31]

Current law

The basic proposition enunciated long ago continues to apply: “A covenant not to compete is enforceable only if it is necessary to protect a legitimate business interest, reasonably limited in time and space, and consonant with the public interest.”[32]

Reasonableness is the touchstone of the analysis and is highly fact-dependent.[33] The context in which the CNC arises (such as employment relationship, contractual relationship) is a critical factor in the analysis.[34] A CNC that is unreasonable because it is too broad, will be scaled back if it is in fact capable of being narrowed.[35]

Even when a CNC is limited in duration, geographic reach, and scope, it will be enforced “only to the extent . . . necessary to protect the legitimate business interests of the employer.”[36] Recognized legitimate business interests are generally identified as the protection of trade secrets, confidential information, and goodwill.[37]

An otherwise valid CNC must still, like other contracts, be supported by consideration. Accordingly, the Supreme Judicial Court has held that a CNC must be “ancillary . . . to an existing employment or contract of employment” or some other “permissible transaction . . . .”[38] However, consideration can exist regardless of whether the CNC is entered into at the beginning of the employment relationship, during the term of employment, or even at the end of an employment relationship.[39]

Texas

Under Texas law "a covenant not to compete is enforceable if it is ancillary to or part of an otherwise enforceable agreement at the time the agreement is made to the extent that it contains limitations as to time, geographical area, and scope of activity to be restrained that are reasonable and do not impose a greater restraint than is necessary to protect the goodwill or other business interest of the promisee."[40] Specific rules apply to physicians, notably that a physician cannot be prohibited "from providing continuing care and treatment to a specific patient or patients during the course of an acute illness even after the contract or employment has been terminated."[41]

However, Texas courts will not enforce a covenant not to compete if the court determines that such a covenant "is against public policy and therefore substantively unconscionable."[42]

Utah

CNCs are enforceable, but any CNC entered into after May 10, 2016 may not extend for a period of more than one year.[43][44]

Virginia

In Virginia, the enforceability of covenants not to compete is governed by common law principles. As restrictions on trade, CNCs are not favored by Virginia courts, which will enforce only narrowly drafted CNCs that do not offend public policy.

In Virginia, a plaintiff must prove by a preponderance of the evidence that the covenant is reasonable in the sense that it is: (1) no greater than necessary to protect its legitimate business interests, such as a trade secret; (2) not unduly harsh or oppressive in restricting the employee's ability to earn a living; and (3) not against public policy. Paramount Termite Control Co., Inc v. Rector, 380 S.E.2d 922, 924 (Va. 1989).

Legitimate business interest

In Virginia, courts weigh the (1) function, (2) geographic scope and (3) duration of the CNC against the employer's legitimate business interests to determine their reasonableness.[45] Additionally, CNCs are only reasonable if they prevent the employee from entering into direct competition with the employer and must not encompass any activity in which the employer is not engaged.[46] Virginia courts will not generally attempt to revise or enforce a narrower restriction in a non-compete agreement. As a result, a drafting error or unenforceable restriction may render the entire agreement unenforceable in Virginia.[47]

Reasonable restriction on employee's ability to earn a living

Second, to enforce the CNC, a plaintiff must show that it is not unduly harsh or oppressive in restricting the employee's ability to earn a living. In Virginia, a CNC is not unduly harsh or oppressive if balancing its function, geographic scope and duration the employee is not precluded from (1) working in a capacity not in competition with the employer within the restricted area or (2) providing similar services outside the restricted area.[48]

Public policy

Third, to enforce a CNC, a plaintiff must show the CNC is reasonable from the standpoint of a sound public policy. Virginia does not favor restrictions on employment and therefore CNCs are generally held against public policy unless they are narrowly drafted as enumerated above. In Virginia, a CNC does not violate public policy if the restrictions it imposes do not create a monopoly for the services offered by the employer or create a shortage of the skills provided by the employee.[49]

Washington

According to Racine v. Bender, CNCs will be enforced by courts if they are validly formed and reasonable.[50] There are exceptions, like in Labriola v. Pollard Group, Inc., where the Washington Supreme Court invalidated a CNC not supported by independent consideration by strictly enforcing the pre-existing duty rule.[51]

Canada

Canadian courts will enforce non-competition and non-solicitation agreements, however, the agreement must be limited in time frame, business scope, and geographic scope to what is reasonably required to protect the company's proprietary rights, such as confidential marketing information or client relations[52] and the scope of the agreement must be unambiguously defined. The 2009 Supreme Court of Canada case Shafron v. KRG Insurance Brokers (Western) Inc. 2009 SCC 6, held a non-compete agreement to be invalid due to the term "Metropolitan City of Vancouver" not being legally defined.[53]

The 2000 Ontario Court of Appeals case Lyons v. Multary established a general preference towards non-solicitation over non-competition agreements, regarding the latter as "much more drastic weapons" and held a non-competition agreement to be invalid when a non-solicitation agreement would have been sufficient to protect the company's interests.

Europe

Generally, CNCs are allowable in Europe only if the employer can show a reasonable business interest in having a CNC.

  • In Belgium, CNCs are restricted to new employments within Belgium and for no more than one year. The employer must pay financial compensation for the duration of the CNC, amounting at least half of the gross salary for the corresponding period.[54]
  • In France, CNCs must be limited in time to a maximum of two years and to a region where there the employee’s new work can reasonably be seen as competitive. The region can be a city or the whole country, depending on the circumstances. The employer must pay financial compensation, typically 30 percent of the last salary.[55] A CNC may not unreasonably limit the possibilities of the employee to find a new employment.
  • In Germany, CNCs are allowed for a term up to two years. The employer must provide financial compensation for the duration of the CNC amounting to at least half the gross salary.[56] Unreasonable clauses – for example, excluding similar jobs throughout the whole of Germany – can be invalidated.
  • In Italy, CNCs are regulated by articles 2125, 2596, and 1751 bis of the civil code.
  • In the Netherlands, non-compete clauses (non-concurrentiebeding or concurrentiebeding) are allowed regarding issues such as moving to a new employer and approaching customers of the old company. Unreasonable clauses can be invalidated in court.[57]
  • In Portugal, CNCs are regulated by article 136 of the labor code and restricted to two years extendible to three years in cases of access to particularly sensitive information. The employer must pay financial compensation for the duration of the CNC but the law doesn’t specify anything regarding the amount of the compensation.[58]
  • In Romania, CNCs are regulated by articles 21-24 of the labor code and restricted to two years. The employer must pay financial compensation for the duration of the CNC, amounting to at least 50 percent of the last 6 months salary.
  • In Spain, CNCs are regulated by article 21 of the labor law. CNCs are allowed up to two years for technical professions and six months for other professions.
  • In the United Kingdom, CNCs are called restraint of trade clauses, and may be used only if the employer can prove a legitimate business interest to protect in entering the clause into the contract. Mere competition will not amount to a legitimate business interest.[59]
  • In Crown dependencies, as there are no directly relevant laws it is generally accepted that UK Crown law applies but in the case of intellectual property many financial and other institutions require employees to sign 10 year or longer CNCs which could be seen to apply even if they leave the country or enter an unrelated field of work. Some of the conditions actually violate the Human Rights Act to wit: freedom of expression and freedom of speech but as the CNC itself is also subject to a non disclosure agreement it is difficult to know just what rights have been signed away. In principle even social media posts, Emails, books etc from before or after the time of employment may be covered by an NDA or CNC despite this also being a blatant breach of human rights and GDPR it could be said that Governments choose the lesser of two evils to increase employment. Some comparisons have been drawn between these documents and the Official Secrets Act.[60]

India

Section 27 of the Indian Contract Act has a general bar on any agreement that puts a restriction on trade.[61] On this basis, it would appear that all non-compete clauses in India are invalid. However, the Supreme Court of India has clarified that some non-compete clauses may be in interest of trade and commerce, and such clauses are not barred by Section 27 of the Contract Act, and therefore valid in India.[62] Notably, only those clauses backed by a clear objective that is considered to be in advantage of trade and commerce survives this test. For instance, a co-founder of a startup who signed a non-compete clause can be held to it,[63] but if a junior software developer or a call center employee signs a non-compete clause with the employer, the same may not be enforceable.

Pakistan

According to Section 27 of the Contract Act, 1872, any agreement that restrains a person from exercising a lawful profession, trade or business is void.[64] However, courts of Pakistan have made decisions in the past in favour of such restrictive clauses given that the restrictions are "reasonable".[65] The definition of "reasonable" depends on the time-period, geographical location and the designation of employee. In the case of Exide Pakistan Limited vs. Abdul Wadood, 2008 CLD 1258 (Karachi), the High Court of Sindh stated that reasonableness of the clause will vary from case to case and depends mainly on duration and extent of geographical territory[66]

Related restrictive covenants

While CNCs are one of the most common types of restrictive covenants, there are many others. Each serves a specific purpose and provides specific rights and remedies. The most common types of restrictive covenants are as follows:

  • Garden-leave clause: a type of CNC by which an employee is compensated during the period that the employee is restricted.
  • Forfeiture-for-Competition Agreement and Compensation-for-Competition Agreement: an agreement by which an employee either forfeits certain benefits or pays some amount of money to engage in activities that are competitive with his former employer.
  • Forfeiture agreement: an agreement by which an employee forfeits benefits when his employment terminates, regardless of whether he engages in competitive activities.
  • Nondisclosure/confidentiality agreement: an agreement by which a party agrees not to use or disclose the other party's confidential information.
  • Non-solicitation agreement: an agreement by which an employee agrees not to solicit and/or not to accept business from the employer's customers.
  • Antipiracy agreement: an agreement by which an employee agrees not to solicit and/or not to hire the employer's employees.
  • Invention assignment agreement: an agreement by which an employee assigns to the employer any potential inventions conceived of during employment.

The enforceability of these agreements depends on the law of the particular state. As a general rule, however, with the exception of invention assignment agreements, they are subject to the same analysis as other CNCs.[67]

Cases

References

  1. ^ Alger, 36 Mass. at 52 (1837).
  2. ^ Oblon, David. "Maryland Federal Court Voids Non-Compete Even After "Blue Penciling" It. (2012)". albo-oblon.com. Albo-Oblon L.L.P. Retrieved 7 July 2014.
  3. ^ Cal. Bus. & Prof. Code §§ 16600, 16601
  4. ^ Blake (1960), p. 625.
  5. ^ Mitchel v. Reynolds, 24 Eng. Rep. 347 (Q.B. 1711)
  6. ^ C. L. Fisk, Working Knowledge: Trade Secrets, Restrictive Covenants in Employment, and the Rise of Corporate Intellectual Property, 1800-1920, 52 Hastings Law Journal no. 2, 453-54 (2001); see also Alger, 36 Mass. at 53.
  7. ^ Larson, Aaron. "How do Non-Compete Agreements Work". ExpertLaw.com. Retrieved 11 June 2017.
  8. ^ "Study Finds Many Companies Require Non-Compete Clauses For Low-Wage Workers". All Things Considered. Michigan Radio. 7 November 2016. Retrieved 11 June 2017. (Approximately 18 percent of the U.S. workforce is bound by a non-compete agreement.)
  9. ^ Tompkins, Al (7 August 2008). "New York Limits 'Non-Compete' Contracts for Broadcasters". Poynter. Retrieved 11 June 2017.
  10. ^ O'Brien, Matt (2018-10-18). "Even janitors have noncompetes now. Nobody is safe". The Washington Post. Retrieved 2018-10-19.
  11. ^ Cal. Bus. & Prof. Code § 16600 (“Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.”); see e.g. Edwards v. Arthur Andersen LLP, 44 Cal. 4th 937 (2008).
  12. ^ a b "Calif. Supreme Court finds noncompete clauses invalid". CNET. November 8, 2008. Retrieved 2008-11-09. Microsoft and Google battled over a noncompete clause in 2005, when Google hired Kai-Fu Lee, an expert in speech recognition technology, even though he had signed a noncompete agreement at Microsoft. Google unsuccessfully worked to move the case from Washington to California, in hopes that the noncompete clause would be ruled invalid. The case was eventually settled outside of court.
  13. ^ "North Dakota Non-Compete Law Shares History with California". www.noncompetereport.com. Jackson Lewis. January 17, 2013. Retrieved January 12, 2019.
  14. ^ 61 Cal. App. 4th 881 (1998).
  15. ^ See EMC Corp. v. Donatelli, Suffolk Superior Court, Civil Action 09-1727-BLS2 (2009).
  16. ^ Cal. Bus. & Prof. Code § 16601.
  17. ^ Cal. Bus. & Prof. Code § 16602.
  18. ^ Cal. Bus. & Prof. Code § 16602.5.
  19. ^ State of Florida. "542.335 - Valid Restraints of Trade". Online Sunshine. State of Florida. Retrieved 26 April 2015.
  20. ^ Vanko, Kenneth. "A Quick State-By-State Guide on the Blue-Pencil Rule". Legal Developments In Non-Competition Agreements. Kenneth Vanko. Retrieved 26 April 2015.
  21. ^ Pollard, Jonathan. "Recent Florida Non-Compete Cases: A Decision from the 3rd DCA on Independent Clauses". Jonathan Pollard LLC. Jonathan Pollard LLC. Retrieved 26 April 2015.
  22. ^ "Casetext". casetext.com.
  23. ^ Reliable Fire Equipment Co. v. Arredondo, 2011 IL 111871 [1] (2011).
  24. ^ Bires v. Waltom, Case No. 8-4680 [2] (2009).
  25. ^ Fifield v. Premier Dealer Services, 993 N.E.2d 938, 942 (Ill. App. Ct. 1st Dist. 2013)[3] (2013).
  26. ^ McInnis v. OAG Motorcycle Ventures, Inc. 2015 IL App (1st) 130097 (June 25, 2015)
  27. ^ Channick, Robert (26 October 2017). "Illinois sues payday lender over low-wage workers forced to sign noncompete agreements". Chicago Tribune. Retrieved 11 August 2018.
  28. ^ "Non-Compete Agreements - Frequently Asked Questions" (PDF). Office of the Attorney General. State of Illinois. Retrieved 11 August 2018.
  29. ^ See e.g., Novelty Bias Binding Co. v. Shevrin, 342 Mass. 714, 716 (1961); Marine Contractors Co., Inc. v. Hurley, 365 Mass. 280, 287 (1974); Edwards v. Athena Capital Advisors, Inc., C.A. No. 07-2418-E, 2007 Mass. Super. LEXIS 378, 4-5 (Super. Ct. Aug. 7, 2007). See also Russell Beck (September 5, 2008). "Noncompete Agreements That Don't Mean What They Say". Archived from the original on 2008-09-11.; Russell Beck, Negotiating, Drafting and Enforcing Noncompetition Agreements & Related Restrictive Covenants (MCLE 5th Ed. 2015).
  30. ^ Alger, 36 Mass. at 53 (1837).
  31. ^ See Sherman v. Pfefferkorn, 241 Mass. 468 (1922).
  32. ^ Lunt v. Campbell, No. 07-3845-BLS, *5 (Super. Ct Sept. 2007), quoting Boulanger v. Dunkin' Donuts Inc., 442 Mass. 635, 639 (2004), citing Marine Contrs. Co. v. Hurley, 365 Mass. 280, 287-88, 289 (1974) and All Stainless, Inc. v. Colby, 364 Mass. 773, 778 (1974).
  33. ^ Edwards v. Athena Capital Advisors, Civil Action No. 07-2418-E (Super. Ct. Aug. 7, 2007) (“Covenants not to compete are valid if they are reasonable in view of all the facts in a particular case.”), citing Marine Contractors. Co. v. Hurley, 365 Mass. 280, 287-288 (1974); All Stainless, Inc. v. Colby, 364 Mass. 773, 778 (1974).
  34. ^ Sentry Ins. v. Firnstein, 14 Mass. App. Ct. 706, 707 (1982) (quoting Restatement (Second) of Contracts § 188 comment g (1981)); Zabota Community Center, Inc. v. Frolova, No. 061909BLS1, *2 (May 18, 2006).
  35. ^ See Edwards v. Athena Capital Advisors, Inc., C.A. No. 07-2418-E, 2007 Mass. Super. LEXIS 378 (Super. Ct., Aug. 7, 2007), quoting All Stainless, Inc. v. Colby, 364 Mass. 773, 778 (1974).
  36. ^ EMC Corp. v. Gresham, No. 01-2084-BLS (Super. Ct. Nov. 2001), citing Novelty Bias Binding Co. v. Shevrin, 342 Mass. 714, 716 (1961); Marine Contractors Co., Inc. v. Hurley, 365 Mass. 280, 287 (1974).
  37. ^ Marine Contractors Co., Inc. v. Hurley, 365 Mass. 280, 287 (1974), citing All Stainless, Inc. v. Colby, 364 Mass. 773, 779-80 (1974); Sentry Insurance v. Firnstein, 14 Mass. App. Ct. 706, 708 (1982); Lunt v. Campbell, No. 07-3845-BLS, *5 (Super. Ct. Sept. 2007), citing Boulanger v. Dunkin' Donuts Inc., 442 Mass. 635, 641 (2004); EMC Corp. v. Gresham, No. 01-2084-BLS (Super. Ct. Nov. 2001), citing Kroeger v. Stop & Shop Co. Inc., 13 Mass. App. Ct. 310, 316 (1982).
  38. ^ Novelty Bias Binding Co., v. Shevrin, 342 Mass. 714, 716-17 (1961).
  39. ^ See Marine Contractors Co., Inc. v. Hurley, 365 Mass. 280, 288 (1974) (“Marine's interest in protecting its accrued good will from possible incursions by Hurley is not weakened by the fact that it negotiated the agreement not to compete at the end of Hurley's employment rather than at some earlier time.”); Novelty Bias Binding Co., v. Shevrin, 342 Mass. 714 (1961); Richmond Bros. Inc. v. Westinghouse Bdcst. Co. Inc., 357 Mass. 106 (1970). But see Zabota Community Center, Inc. v. Frolova, No. 061909BLS1, *2 n.3 (Super. Ct. May 2006) (Although the plaintiff cited its mid-employment threat of termination as proof of consideration for the CNC, the court “exercising its equitable powers, sees it rather differently.”).
  40. ^ Texas Business and Commerce Code, Section 15.50a.
  41. ^ Texas Business and Commerce Code, Section 15.50b.
  42. ^ Sec. Serv. Fed. Credit Union v. Sanders, 264 S.W.3d 292, 297 (Tex. App.–San Antonio 2008, orig. proceeding)
  43. ^ Romboy, Dennis (2016-03-09). "Utah lawmakers pass controversial bill on noncompete contracts". DeseretNews.com. Retrieved 2017-03-19.
  44. ^ "What Utah Employers Need to Know About H.B. 251: Post-Employment Restrictions Act | Berman Fink Van Horn P.C." Berman Fink Van Horn P.C. 2016-03-30. Retrieved 2017-03-19.
  45. ^ See Advanced Marine Enters., Inc. v. PRC Inc., 501 S.E.2d 148, 155 (Va. 1998); Simmons v. Miller, 544 S.E.2d 666, 678 (Va. 2001) (stating that the function, geographic scope and duration of the CNC must be considered together to determine the reasonableness of the restriction).
  46. ^ See e.g. Omniplex World Servs. Corp. v. US Investigations Servs., Inc., 618 S.E.2d 340, 342 (Va. 2005) (“covenants not to compete have only been upheld when employees are prohibited from competing directly with the former employer or through employment with a direct competitor.”); see also Motion Control Sys. v. East, 546 S.E.2d 424 (Va. 2001).
  47. ^ Non-Competition Law Trends in Virginia, Virginia Employment Lawyers Blog, June 5, 2015
  48. ^ See Paramount, 380 S.E.2d at 925.
  49. ^ See Blue Ridge Anesthesia & Critical Care, Inc. v. Gidick, 389 S.E.2d 467, 470 (Va. 1990); Paramount, 380 S.E.2d at 925.
  50. ^ Racine v. Bender, 141 Wash. 606, 615, 252 P. 115 (1927)
  51. ^ Ayres, I., and Speidel, R.E. Studies in Contract Law, Seventh Edition. Foundation Press, New York, NY: 2008, p. 81
  52. ^ http://www.cba.org/abc/nouvelles/pdf/ADD-enforceability.pdf
  53. ^ Kelly Harris (6 April 2009). "AMBIGUITY MAKES NON-COMPETE CLAUSE INVALID: SCC". Archived from the original on 2009-07-10.
  54. ^ Clause de non-concurrence – conditions de validité. DroitBelge.net.
  55. ^ Qu'est-ce qu'une clause de non-concurrence ?. Service-Public.fr
  56. ^ German law, §74 HBS, abs. 2
  57. ^ "Gebonden aan concurrentiebeding?". Intermediair. 2004. Archived from the original on 2006-06-14.
  58. ^ Portuguese labour code, Article 136
  59. ^ "Restraint of trade clauses - Commercial Law Articles and News - Lawdit Reading Room". archive.org. 3 March 2012.
  60. ^ https://amberhawk.typepad.com/amberhawk/2017/12/under-the-gdpr-does-processing-personal-data-in-the-public-interest-include-function-creep.html
  61. ^ http://www.vakilno1.com/bareacts/indiancontractact/indiancontractact.html#27_Agreement_in_restraint_of_trade_void
  62. ^ Non-compete clauses in Employment Agreements: Are they enforceable in India?, iPleaders.in, 29 May 2014, retrieved 31 October 2014
  63. ^ CO-FOUNDER’S AGREEMENT: Things you should look out for while entering into a co-founders agreement, iPleaders.in, 9 June 2014, retrieved 31 October 2014
  64. ^ Labor and Employment Practice Group Non-Competition, LexMundi Puplications Ltd., 2010, retrieved 24 May 2016
  65. ^ Can I be stopped from undertaking competitive work after resignation from a company?, 13 March 2014, retrieved 24 May 2016
  66. ^ Counsel Pakistan - Corporate Decisions See Exide Pakistan Ltd. vs. Malik Abdul Wadood 2009 CLD 716 (Division Bench – Karachi)
  67. ^ For more detailed information, see Beyond the noncompete
  68. ^ "Apple Exec Hired From IBM Ordered to Stop Work". PC World. November 8, 2008. Retrieved 2008-11-09. In June 2006, Papermaster signed a non-compete agreement in which he agreed not to work for an IBM competitor for at least a year if he ever left IBM, according to court documents. He informed IBM of the Apple job offer last month. On October 20, IBM offered him a pay raise as well as the option to accept one year's salary if he promised not to go to a competitor, but Papermaster submitted his resignation the next day. On October 22, IBM filed suit.
  69. ^ "Paul Teutul Jr Designs, A New Orange county Chopper versus Paul Teutul Sr?". TrendyPress. August 13, 2010. Retrieved 2011-02-07.

Works cited

  • Blake, Harlan M. (1960). "Employee Contracts Not To Compete". Harvard Law Review. 73 (4): 625–91. JSTOR 1338051.

External links

ABCO Foods

ABCO Foods was a chain of grocery stores in Phoenix and Tucson, Arizona for over 15 years, formed from a 1984 spin-off sale by the Alpha Beta division of American Stores. The Arizona regional management secured private financing to purchase the Arizona stores (most Alpha Beta locations were in California). Part of the sale agreement included a 5-year term to continue use of the Alpha Beta brand in Arizona.The name "ABCO Markets" came about when the Alpha Beta branding agreement expired. The new name was derived from Alpha Beta's initials. The agreement also included a non-compete clause: American Stores could not reenter Arizona for a specified period of time. This agreement later allowed ABCO a first right of refusal when American Stores elected to sell the Arizona locations of Lucky supermarkets.The company was under the head of Edward Hill before being sold to the Fleming Companies, Inc. in 1996. Under Fleming's leadership, ABCO changed its name to "ABCO Foods Desert Market" and converted all of its stores to a Southwestern-style desert exterior and interior design format, featuring facades of adobe and a very prominent pink color on its checkstands. In 1997, ABCO Foods applied for licenses to sell liquor at nine Tucson locations [1].

When Fleming decided to pull out of the retail category, ABCO was one of the first chains put on the block. The result was the loss of these markets, consisting of 56 stores at the time of its closure. The last ABCO store closed in the summer of 2001. The stores were sold separately to many different companies, including Albertsons, Bashas', Safeway Inc., Southwest Supermarkets, and many independent grocers operating as IGA stores. Over the past few years, many of these stores have, in turn, changed hands from their original buyers. There have been rumors that ABCO Foods re-launched in 2006, closing again by May 2007, however these rumors are unsubstantiated.

Alan Freed

Albert James "Alan" Freed (December 15, 1921 – January 20, 1965) was an American disc jockey. He became internationally known for promoting the mix of blues, country, rhythm and blues music on the radio in the United States and Europe under the name of rock and roll. His career was destroyed by the payola scandal that hit the broadcasting industry in the early 1960s.

Candyman (2010 film)

Candyman is a documentary film by director Costa Botes about the rise and fall of David Klein, the man who developed and was the original copyright owner of Jelly Belly jelly beans. Klein went on to adopt the title of Candyman in his Candyman Kitchens business once his non-compete clause was up following sale of the Jelly Belly copyright.The film heavily features David Klein and his son Bert Klein, but also includes interviews from then partner and supplier Herman Goelitz Candy Company (now renamed Jelly Belly) as well as Weird Al Yankovic.

The film was featured in at the Slamdance Film Festival where it averaged 4.16/5 stars in audience reviews, Hot Docs Canadian International Documentary Festival in Toronto, Rincon International Film Festival in Puerto Rico and the Omaha Film Festival in Omaha, Nebraska, all in 2010. It received mixed reviews from critics earning a B+ rating from The Onion's A.V. Club and 6/10 stars from PopMatters and 2/5 stars from Reel Film.

Clean hands

Clean hands, sometimes called the clean hands doctrine or the dirty hands doctrine, is an equitable defense in which the defendant argues that the plaintiff is not entitled to obtain an equitable remedy because the plaintiff is acting unethically or has acted in bad faith with respect to the subject of the complaint—that is, with "unclean hands". The defendant has the burden of proof to show the plaintiff is not acting in good faith. The doctrine is often stated as "those seeking equity must do equity" or "equity must come with clean hands". This is a matter of protocol, characterised by A. P. Herbert in Uncommon Law by his fictional Judge Mildew saying (as Herbert says, "less elegantly"), "A dirty dog will not have justice by the court".The clean hands doctrine is used in U.S. patent law to deny equitable or legal relief to a patentee that has engaged in improper conduct, such as using the patent to extend monopoly power beyond the claims of the patent.A defendant's unclean hands can also be claimed and proven by the plaintiff to claim other equitable remedies and to prevent that defendant from asserting equitable affirmative defenses. In other words, 'unclean hands' can be used offensively by the plaintiff as well as defensively by the defendant. Historically, the doctrine of unclean hands can be traced as far back as the Fourth Lateran Council.

Connie Sison

Connie Sison (born December 8, 1975 in Pasig City, Philippines) is a Filipino television reporter, host and news anchor. She is currently the news anchor of Balitanghali (GMA News TV) and also one of the hosts of GMA 7's morning show Unang Hirit, and a health program called Pinoy M.D. with 4 other doctor co-hosts.

Dwyer and Michaels

Greg Dwyer and Bill Obenauf, aka Bill Michaels, are the radio personalities and website authors known as Dwyer and Michaels. On air together since the late 1980s, they write, host and produce a popular morning show in the U.S. Midwest currently running on WXLP-FM in the Quad Cities. Their show was syndicated for over a year on KRNA-FM in Cedar Rapids as well. Their website, 2Dorks.com, reaches more than 15,000 unique visitors weekly.

Dwyer and Michaels are as well known for their goofy on-air antics and frequent personal appearances as for their authority in constitutional law and are known nationally for their animal rights activism. The couple made international news when they released the resident elephant from Niabi Zoo back into wild environment of Carbon Cliff, IL. Their return to WXLP following an 11-year stint with Clear Channel Communications station KCQQ-FM became the subject of some controversy in early 2007 when Clear Channel sued Dwyer and Michaels and their news person, Beth Davis, alleging that they had violated a non-compete clause in their contract. The judge ruled in favor of the team, who had taken their show to Cedar Rapids, Iowa before returning to the Quad Cities.

Gem Air

Gem Air is a commuter airline based in Salmon, Idaho, United States. It is owned by the former owners of Salmon Air. They sold the Salmon Air name to McCall Aviation, but kept their operating certificate. When their non-compete clause with McCall Aviation expired, they began full operations again, under the same certificate, but with the new Gem Air name.

International Business Machines Corp. v. Papermaster

In 2008, Mark Papermaster, IBM's Vice President of the Blade Development Unit, became the subject of a notable trade secret misappropriation and non-compete clause case when he announced a plan to move to Apple as Senior Vice President of Devices Hardware Engineering. On October 22, 2008, IBM filed a complaint against Papermaster claiming breach of contract and misappropriation of trade secrets. They sought a preliminary injunction to prevent Papermaster from working at Apple, claiming his employment violated non-competition agreement.

KZFM

KZFM (Hot Z95) is a Corpus Christi, Texas, United States-based radio station with a Rhythmic Top 40 musical format. It is owned by Malkan Interactive Communications, LLC and broadcasts at a frequency of 95.5 MHz with an Effective Radiated Power of 100,000 Watts. KZFM was once home to radio personality Glenn Beck. The station's studios and offices are located on Leopard Street just west of downtown Corpus Christi, and its transmitter tower is located south of the city in unincorporated Nueces County.

Kristi Lee

Kristi Lee, whose real name is Theresa Ritz (born July 17, 1960), is the news director of the nationally syndicated radio show The Bob & Tom Show and is responsible for delivering newscasts of various headlines (which are often used for humorous takeoffs) during the show.

Lee often hosted or participated in Bob and Tom Radio: The Comedy Tour shows. She is the mother of two daughters, Ava and Sophie, and she has been married and divorced three times.

Lee graduated from Ben Davis High School in Indianapolis and got her start on WBDG, the school's station. She attended Indiana University.

Lee's first full-time job in communications was at WRTV, where she was a television engineer for six years. At the time, she was also a part-time disc jockey for WFBQ Q95, the station which eventually hired Bob Kevoian and Tom Griswold for mornings. She began her full-time radio career on The Bob and Tom Show in 1988. Lee was also featured on ESPN and ESPN2 as a sideline reporter, covering events like lacrosse, auto racing, and the first three X Games on ESPN2. In the mid-nineties, she was the sideline reporter for the NBA's Indiana Pacers.

On January 11, 2016, Lee announced that she was leaving The Bob and Tom Show. Prior to her later return, Lee's last "on air" appearance was on December 17, 2015. In an April 2016 appearance on the Hammer and Nigel podcast, Lee revealed that her Bob and Tom contract had been "rolling over for 12 years" and included a three-month non-compete clause, a length brief enough as to be considered "unheard of in our business." Since any new contract would likely have extended her non-compete requirement to six or 12 months, Lee said she chose not to renew her contract. It was "time to try something different," Lee said. "If I'm going to do this, it's going to have to be now." The announcement and timing of Kevoian's December 2015 retirement was a surprise to Lee, and she told the Dan Dakich Show that "Bob wasn't there, and I didn't want to sit in that room without Bobby" despite her continued fondness for Griswold and Chick McGee, the show's remaining longtime stars.On July 8, 2016, The Bob and Tom Show announced that Lee would return to the show on July 11, 2016. In an interview with BoomerTV's Patty Spitler, Lee reiterated that a desire to find her own voice as an interviewer and to create her "own brand" were her primary motivations for what ended up being a hiatus from The Bob and Tom Show. Lee also said Griswold initiated the discussions which led to her return.During her six-month break from Bob and Tom, Lee began hosting a podcast titled Kristi Lee Uninterrupted, which debuted on April 5, 2016. The podcast is affiliated with Dr. Will's Neighborhood. Its title is a reference to Griswold's habit of constantly interrupting her Bob and Tom Show news reports. Lee announced that she will continue to produce her podcast.In February 2017, it was announced that Kristi Lee was inducted into her high school's hall of fame. She will have a plaque with her name and picture on it mounted on the Ben Davis High School Wall of Fame. She has always maintained that she owes her successful career to her start at the school's radio station, WBDG, where her lifelong love of the communications and entertainment industry began.

Mark Papermaster

Mark D. Papermaster (born 1961) is an American business executive currently serving as the chief technology officer (CTO) and senior vice president (SVP) for Technology and Engineering at Advanced Micro Devices (AMD). Papermaster previously worked at IBM from 1982 to 2008, where he was closely involved in the development of PowerPC technology and served two years as vice president of IBM's blade server division. Papermaster's decision to move from IBM to Apple, Inc. in 2008 became central to a court case considering the validity and scope of an employee non-compete clause in the technology industry. He became senior vice president of devices hardware engineering at Apple in 2009, with oversight for devices such as the iPhone. In 2010 he left Apple and joined Cisco Systems as a VP of the company's silicon engineering development. Papermaster joined AMD on October 24, 2011, assuming oversight for all of AMD's technology teams and the creation of all of AMD's products, and AMD's corporate technical direction.

Messer Group

The Messer Group GmbH is a supplier of industrial gases. Business is focused on 30 European and Asian countries. The company headquarters are located in Bad Soden (Germany).

Messer is selling gases for industrial use like Oxygen, Nitrogen, Argon, Carbon Dioxide, Hydrogen, Helium, shielding gases and gases for medical use.

Metro Pulse

Metro Pulse was a weekly newspaper in Knoxville, Tennessee. It was founded in 1991 by Ashley Capps, Rand Pearson, Ian Blackburn, and Margaret Weston, and was a member of the Association of Alternative Newsweeklies.

In 2007, Metro Pulse was sold to the media conglomerate E.W. Scripps Company, which also owns several other local media outlets, including Knoxville's daily newspaper, the Knoxville News Sentinel, and the Shopper News in Halls.

Scripps ceased publication of the newspaper on October 15, 2014. The News Sentinel, Knoxville's daily newspaper, also owned by Scripps, launched a free arts and entertainment supplement in its place. Employees were told not to talk to the media or they would not receive severance. In November 2014, a group of Knoxville journalists announced plans for Hard Knox Independent, a new alternative weekly to launch in January 2015 that aims to fill the niche formerly occupied by Metro Pulse. Meanwhile, the actual editors of Metro Pulse declined to sign their severance agreements, which included a non-compete clause with the News Sentinel. Instead, they announced plans to start their own weekly paper, the Knoxville Mercury, utilizing a Kickstarter campaign and donations collected by a non-profit, the Knoxville History Project, for start-up funding. The Knoxville Mercury was officially launched in March 2015.

MindMup

MindMup is a mind mapping application written primarily in JavaScript and designed to run in HTML5 browsers. It can also be used to create argument maps and concept maps. MindMup is released under an MIT-like license with a non-compete clause that restricts use, which makes it non-free software. The source code is available from GitHub.MindMup has been praised for its simple and intuitive interface and short learning curve and power-user features. It has been recommended for the use in education, in particular due to anonymous access and not requiring account signup to use cloud services.

Paul Jr. Designs

Paul Jr. Designs (PJD) is a lifestyle brand motorcycle customizer and clothing vendor based in,Montgomery, New York, USA. Paul Teutul Jr. founded the design firm in 2009 after waiting out a one-year non-compete clause with his former company, Orange County Choppers (OCC).

Teutul opened the motorcycle company in April 2010. TLC then commissioned a spin-off series titled American Chopper: Senior vs. Junior, based on the original series American Chopper which ran for 6 seasons, now featuring builds from Orange County Choppers and Paul Jr. Designs.

Sidney Craig

Sidney Harvey Craig (March 22, 1932 – July 21, 2008) was an American businessman who was the business partner and husband of Jenny Craig, the fitness expert. Together, they founded the weight management company Jenny Craig, Inc. and expanded the company throughout the United States, Australia, and Canada.

Thorsten Nordenfelt

Thorsten Nordenfelt (1 May 1842 – 18 August 1920), was a Swedish inventor and industrialist.

Nordenfelt was born in Örby outside Kinna, Sweden, the son of a colonel. The surname was and is often spelt Nordenfeldt, though Thorsten and his brothers always spelt it Nordenfelt, and the 1881 Census shows it as Nordenfelt. The family home in that year was Leinster Lodge on the Uxbridge Road, Paddington in west London.

Thorsten worked for a Swedish company in London from 1862 to 1866 and migrated to England in 1867 when he married Emma Stansfeld Grundy.

Thorsten Nordenfelt and his brother-in-law started a small business to trade Swedish steel for British rails in 1887. Later on he founded Nordenfelt Guns and Ammunition Company, ltd to develop a machine-gun designed by Helge Palmcrantz that would be referred to as the Nordenfelt gun. His company also designed a range of anti-torpedoboat guns in calibres from 37 to 57 mm, that were produced in Erith, Kent, Stockholm and Spain. Under pressure from Rothschild and Vickers his company merged with Maxim's in 1888 to form The Maxim Nordenfelt Guns and Ammunition Company.

After a personal bankruptcy Nordenfelt was forced out of the Nordenfelt-Maxim company in 1890 and left England for France, where his new company, Société Nordenfelt, designed the eccentric screw breech used on the French 75. Legal action followed (Nordenfelt v Maxim, Nordenfelt Guns and Ammunition Co Ltd) over a non-compete clause Nordenfelt had signed.

In 1903 he returned to Sweden and retired.

In 1902 a public house named after Thorsten Nordenfelt was built at 181 Erith Road, Erith just along from the Gun and Carriage works of Vickers, Sons and Maxim (previously Maxim Nordenfelt Guns and Ammunition Company) . Named 'The Nordenfelt Tavern' it was built to the design of Jonathan G. Ensor (1852/3-19??), architect for brewer Watney Combe & Reid

Tupelo T-Rex

The Tupelo T-Rex was a professional ice hockey team in the Western Professional Hockey League and played their home games at BancorpSouth Center from 1998 to 2001. The owners of the T-Rex would also field a junior team in the America West Hockey League from 2001 to 2003 when they were unable to continue fielding a professional team.

Vijay Sankeshwar

Vijay Sankeshwar (born 2 August 1950) is an Indian businessman. He along with Anand Sankeshwar (Managing Director) is the chairman of India's largest logistics firm VRL Group. He is also known for being the owner of the largest fleet of commercial vehicles in India.He left BJP and founded the Kannada Nadu Party. Later he joined the Karnataka Janata Paksha of BJP outcast Yeddyurappa; the party eventually merged back with BJP. Sankeshwar was also a former Member of Parliament from North Dharwad constituency as a BJP member.

Sankeshwar previously owned Karnataka's largest circulating newspaper, Vijaya Karnataka, until it was sold to Bennett, Coleman and Co. Ltd. (The Times Group) for an undisclosed sum in 2007. After the expiry of a five-year non-compete clause he launched Vijaya Vani in 2012. Vijaya Vani is now the #1 Kannada daily newspaper, with 8 lakh+ sold copies every day.Sankeshwar launched a new Kannada channel, Digvijay 24X7, on April 4, 2017.

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