Settling Non-Compete Cases: Postponing Battle For Another Day?

Settlement of lawsuits is almost universally considered a good thing. Among the many benefits is the notion that the conflict ends immediately and the parties can go on with their lives with the comfort of certainty. Right? Well, maybe. In non-compete cases, an employer might consider settling because it fears an unfavorable determination by the court that the geographical, temporal, or substantive scope of the non-compete agreement at issue may be overly broad. But some cases suggest that settlement might simply postpone this determination until another day. According to these courts, this is true because restrictive covenants in settlement agreements are subject to the same strict judicial scrutiny applied to employment agreement covenants.