Non-competes

Dottie

Recently I read an article regarding non-compete agreements that indicated there are some states in which such agreements are illegal. Is there a way to find out in which states these agreements are legal and in which they are illegal? We currently operate in 4 Midwest states and are in the process of moving into three more states. I would like to be able to determine where we can legally ask our professional people to sign our non-compete/non-disclosure. It is not a state-to-state issue. The non-compete is within a 5-mile radius for two years after employment terminates with our company.

System

If you don't mind listing which states you are located in/locating to, I'll contact our attorneys in those states to get their feedback on non-compete agreements. You can reply here or e-mail me directly by clicking the first icon next to my name above (just after "Christy Reeder (77 posts)").

Christy Reeder
Website Managing Editor
e-mail: [email]WebEditor@HRhero.com[/email]
[url]www.HRhero.com[/url]

Mike Maslanka

there is also an excellent book by bna(the bureau of national affairs)which compiles the laws on non-competes in all states,with case cites...a companion book deals with the duty of loyalty and offers ideas on how to ptoect yourself in the abscence of non-competes or as an adjunct to them...i think the 800 number is 1-800-960-1220...mike maslanka

Paul

Dottie,

Run, do not walk, to your corporate attorney before you venture into this area. We use identical restrictive covenants & non-competes (BTW - they are not the same thing) in Kansas and Missouri, while down in Texas they have to be modified to comply with Texas laws. We use these for all positions (clerical all the way up to VP).

Two things to keep in mind:
1. This is a fairly "fluid" topic on a state-to-state basis so you will have to keep on top of the laws once you have the covenants drafted.
2. Your covenant is only good if you enforce it. Don't take the time or spend the money if you are not going to pursue those people that break it.

I hope this helps. Good luck.

System

[font size="1" color="#FF0000"]LAST EDITED ON 06-22-01 AT 11:23AM (CST)[/font][p]Paul is right. I heard back from 7 attorneys in separate states, each of which said non-compete agreements are legal in their state, but that doesn't mean every non-compete agreement is enforceable.

Susan Fentin, editor of Massachusetts Employment Law Letter and attorney with the law firm Skoler, Abbott & Presser P.C., noted "As with most states [non-compete agreements] are disfavored unless they are reasonable. Without knowing more about the company and its products, I wouldn't want to venture a guess as to whether the described non-compete is "reasonable," but the court will usually look to see whether the individual is prohibited from earning a living at a trade in which he/she has become skilled and whether there is any risk to the company because of working for a competitor. Bottom line: [You] should talk to employment counsel in each state before relying on the non-competes to do what [you] wants them to do.

By the way, the states I heard back from that said it is legal to draft a reasonable non-compete agreement are CT, MA, MI, IN, IL, OH, and NY. If you're wondering about your state, contact the editors of your state's Employment Law Letter: [url]http://www.hrhero.com/empnl.shtml[/url]

Christy Reeder
Website Managing Editor
[url]www.HRhero.com[/url]