When is a Non-Compete Agreement Enforceable in North Carolina?
In general, non-compete agreements are enforceable in North Carolina so long as they meet the following criteria:
- The agreement must be in writing;
- The non-compete agreement must be part of an employment contract;
- The agreement must be reasonable as to time and geographic territory;
- The agreement is made in exchange for valuable consideration; and
- The non-compete agreement must protect the legitimate business interests of the employer.
However, this is an area of the law that is rife with peril.
Often non-compete agreements can be successfully attacked for overly broad restrictions on the employee.
For example, a common limitation on non-competes is with respect to the duration of the limitations placed on the employee. If the employee is an individual in general the maximum duration for the agreement is five years.
Thus, if the agreement is for seven years, it is likely that the court would invalidate the whole of the non-compete.
There are great many factors typically related to the reasonability of time and territory that the court will look to in order to determine whether a non-compete should be upheld.
The reasonability of the time and territory restrictions and whether the restriction is directly related to the business interests of the employer are typically the most vulnerable to attack.
At Kurtz Law we have considerable experience both drafting non-compete agreements (none of which has ever been successfully attacked) as well as experience in successfully attacking poorly drafted non-compete agreements.
If you need a bullet-proof non-compete agreement, give us a call.
Similarly, if you need to explore whether you have grounds to invalidate a non-compete agreement to which you are currently bound, we can help.
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