Non-compete agreements

Discussion in 'Prop Firms' started by cbstrader, Nov 20, 2002.

  1. cbstrader

    cbstrader

    Generally speaking, are non-compete agreements enforceable in the courts? I'm aware the details of the contract differ for each firm, and laws vary by state, but has anyone lost a case?
     
  2. bone

    bone ET Sponsor

    Please refer to previous thread in 2002 on the topic.
     
  3. No;generally speaking ...
     
  4. rob1799

    rob1799

    In the 1999 New York Case: BDO Seidman v. Hirschberg, 1999 N.Y. Int. 0082 (May 13, 1999) the following was noted: The modern, prevailing common law standard of reasonableness for employee agreements not to compete applies a three–pronged test. A restraint is reasonable only if it: (1) is no greater than is required for the protection of the legitimate interest of the employer, (2) does not impose undue hardship on the employee, and (3) is not injurious to the public ( see, e.g., Technical Aid Corp. v Allen, 134 NH 1, 8, 591 A2d 262, 265–266;Blake, op. cit., at 648–649; Restatement [Second] of Contracts § 188). A violation of any prong renders the covenant invalid.
     
  5. rob1799

    rob1799

    Traditionally, provisions in non-compete agreements that have been enforced by American courts are intently adapted provisions intended to protect only legitimate employer interest.
    Unenforceable covenants would sever common law aversion to limiting a person's ability to earn a living or prohibit legitimate competition.

    A non-compete agreement must be reasonably and clearly limited both in time and geography. Some courts have found a period of 18-months to be reasonable. The geographical area must coincide with the exact area in which an employee had business contacts during his employment. In other words, if a company does business within an entire state, but the specific employee worked in only one county, the employer cannot require a non-compete throughout the entire state.

    ----figured it might be helpful to more than just me---