DJ Kreyol
Joined: 11 Mar 2006
Posts: 6506
Location: Street sounds swirling through my mind!
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 Posted: Mon Sep 10, 2012 12:28 pm Post subject: |
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| Quote: | A non-compete clause (often NCC), or covenant not to compete (CNC), is a term used in contract law under which one party (usually an employee) agrees not to pursue a similar profession or trade in competition against another party (usually the employer). 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 abusing 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 as a matter of public policy. 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.
The extent to which non-compete clauses are legally allowed varies per jurisdiction. Some jurisdictions, such as the state of California in the US, invalidate non-compete-clauses for all but equity stakeholders in businesses. |
I honestly like where Ralph is going, because let's be clear he has been burned too many times.
However, the question is whether the non-compete clause is actually enforceable.
Is 3 YEARS too long?
Is restricting a SINGER or GUITARIST from joining another band FAIR when this person only has this skill to earn a loving?
These are all questions of FACT that has to found by a judge or jury.
It's a case by case thing....
But non-compete clauses, through my experience, shifts the BURDEN on the employer to prove that the CLAUSE is fair.
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"Mrs. Jones, we got a thing going on...." |
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