enforceability

Ten Things: Drafting an Enforceable Non-Compete Agreement

For the last several years, non-compete agreements have been under attack in the U.S. by regulators, legislators, and even the courts.  For example, in October 2018, Massachusetts joined states like California, North Dakota, Montana, Idaho, Utah, and others by enacting a law regulating non-compete agreements, including providing for “garden leave” and making them inapplicable to “non-exempt” employees.  Courts do not favor non-competes and will often look for any reason to limit them or invalidate them completely. But, love them or hate them, non-compete agreements are here to stay, and businesses continue to rely on them as one way to protect customer goodwill along with confidential and proprietary information.  See, for example, the recent battle between Google’s Waymo unit and Uber over Anthony Levandowski and the theft of self-driving car technology and know-how.  Still, it’s clear that the forces fighting against non-competes are stronger than ever.  For example, there is legislation pending in Vermont to ban all non-compete agreements, and at the federal level to ban them for low-wage workers.  Which is why it’s important for in-house counsel to take every step possible to ensure the non-compete agreements used by their companies have the best chance of surviving regulatory and judicial scrutiny.  This edition of “Ten Things” discusses some tips on how to draft an enforceable non-compete agreement:

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