Non-Compete Agreements

North Carolina courts recognize employers have legitimate business interests that can only be protected through the use of non-compete agreements. Such agreements generally limit an employee’s ability to work in the same industry or use trade secrets after leaving a company. However, North Carolina courts are hesitant to prohibit an employee from pursuing work. As such, employers must be careful to narrowly tailor the scope of all non-compete agreements to ensure enforceability. Overbroad non-compete agreements are particularly dangerous as North Carolina courts will not rewrite non-compete clauses for a business. If the clause is unenforceable, then there is no non-compete protection (as opposed to the Court giving a more limited protection that would be lawful).

The party seeking to enforce a non-compete agreement has the burden of proving the reasonableness of its restrictions. Courts generally require that (1) the non-compete agreement be in writing and signed by the person against whom enforcement is sought; (2) ancillary to an affirmative agreement; (3) based upon valuable consideration; (4) reasonable as to time and territory; (5) designed to protect a legitimate business interest; and (6) fair to both parties.

Maginnis Howard has significant experience in assisting employees in negotiating a less restrictive non-compete with their employer, or if necessary, litigating their case. If you are an employer or employee dealing with issues arising from non-compete agreements, contact us. We are experienced in assisting employers and employees in successfully negotiating, modifying, or rescinding non-compete agreements.