Noncompete Agreements In Raleigh, North Carolina
At my firm, North Raleigh Law, I assist clients in drafting and analyzing the noncompete clause and noncompete agreements. Generally, every situation is unique between the employee and employer. Drafting an enforceable noncompete, or analyzing the viability of an existing noncompete is essential — especially considering how much is at stake — either protecting the employer’s business, or allowing the employee to continue employment elsewhere. Don’t wait for litigation; review your noncompete clause and noncompete agreements before there is an issue.
Are Restrictive Covenants Enforceable?
In North Carolina, a restrictive covenant is valid and enforceable if it is:
- In writing entered into at the time and as a part of the original contract of employment
- Based on a valuable consideration
- Reasonable both as to the time and territory
- Designed to protect a legitimate business interest of the employer
- Not against public policy
Because this is a balancing test, the analysis of whether the agreement is enforceable will vary case by case. A long time period may be enforceable where the geographic scope is very limited, and the definition of competition is very limited (and vice versa).
In determining whether restrictions on competition are reasonable, North Carolina courts balance the following factors:
- Area, or scope, of the restriction the area assigned to employee
- Area in which the employee actually worked or was subject to work
- Area in which the employer operated
- Nature of the business involved
- Nature of the employee’s duty and his knowledge of the employer’s business operation
If the noncompetition agreement for an employee is found by a court to be enforceable, the employer may successfully prevent the employee from working in their industry for a reasonable time. If the agreement is unenforceable, the employer may be left with little to no protection from the employee aggressively competing with the business.