New Rules For Nevada Noncompetes

Nevada Companies Must Review Their Noncompete Agreements

The Nevada Supreme Court recently has injected substantial uncertainty into any Nevada contract that contains a noncompete agreement, and companies need to conduct a careful review of any contract that contains a noncompete to ensure that those contracts remain enforceable under the new rules.

In short, the Nevada Supreme Court has held that if a noncompete agreement is determined by a Nevada court to be unreasonable in any way, the court will not reform or modify the noncompete agreement, but will instead find it wholly unenforceable. Because of this rule, the bottom line for companies is that they must review any of their contracts that contain a noncompete agreement to determine whether the contract remains enforceable. This advice applies most directly to employment contracts, but other contracts such as assets purchase agreements, severance agreements, and settlement agreements may be affected as well.