Top Restrictive Covenant Agreement Considerations For Employers

Protecting Your Competitive Edge

This article continues our discussion from the last newsletter of important considerations on which companies should focus to create an enforceable array of competitive advantage protections. In this, and in subsequent client communications, we will focus on the most important considerations, not only contractually but also under state and federal common and statutory law.

Employee raiding covenants. Though most state courts will permit reasonable contractual restrictions on not soliciting other company employees, there are some jurisdictions that have refused to enforce such restrictions. Courts are also mixed on the extent to which an employee's duty of loyalty, as opposed to a company officer's fiduciary duty, restricts the employee from encouraging a co-worker to join the employee at a competitor, so you should review the state law that will apply to your situation.