Do Non Compete Agreements Hold Up In North Carolina

One of the most controversial issues when it comes to the application of non-competition rules is the type of work after the employment relationship that your former employee cannot perform. The courts will review the language of your agreement to determine whether the restrictions are closely suited to the protection of your competitive interests or, more specifically, whether the extent of the professional obligations that the employee has exercised for you in the course of his or her work corresponds to those that are excluded after the non-competition clause. Looking briefly at the graph, you can see that most restrictions are two years or less enforceable, while most restrictions are no more than two years. If the two unusual cases where a ten- and seven-year restriction has been maintained are set aside as outliers, the average enforceable non-compete clause in North Carolina is exactly twenty-four months. On the other hand, the unenforceable average agreement not to show up in North Carolina provided for a time limit of about thirty-nine months. These data therefore imply that by deciding to choose a three-year limit instead of two, an employer moves from a confederation that is normally applied to a confederation that is not. While there are certainly cases where contracts with restrictions of two years or less have not been applied, the data generally indicate that employers will be most successful in enforcing non-competition clauses if they stay within two years. In fact, of the eight cases where a limit of two years or less was removed, all but one26 contained either territorial restrictions of at least two hundred miles27 or were applicable to health professionals.28 Therefore, North Carolina jurisprudence strongly implies that almost any non-compete clause be enforced with a period of two years or less covering non-medical business practices, as long as the territorial restriction is not too broad. 22.

See also Engineering Assoc., Inc. v. Pankow, 268 N.C 137, 139, 150 P.E.2d 56, 58 (1966) (assuming that a five-year load is not inappropriate under extreme conditions). Employers often ask their key employees to sign competition bans, commonly referred to as “non-competition”. North Carolina law is quite strict when it comes to refusing to impose such agreements in an employer-employee context. In fact, North Carolina law requires a judge to carefully consider the terms of an employee`s non-compete clause before imposing it. In cases where a business is sold and the seller`s employee becomes an employee of the buyer and is then asked to sign a non-compete clause, new consideration may be required, depending on the type of business transfer, to establish an enforceable non-compete clause with the new owner. . .

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