Noncompete News - January 2014

State Laws Governing Noncompete Agreements May be a Trap for the Unwary

As discussed previously, noncompete agreements can be a powerful tool to help employers protect their confidential, proprietary or trade secret information from disgruntled departing employees.  However, the differing requirements imposed by state laws applicable to noncompetition agreements can cause unforeseen problems for employers seeking to enforce these agreements in multiple states.  For example, some states permit courts to "blue pencil" or amend unenforceable portions of otherwise enforceable agreements, while other states prohibit such amendments.  Additionally, in some states, such as California, covenants not to compete are illegal because they violate public policy by limiting open competition and employee mobility.