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Employee Rights

Non-Compete Agreements

Non-compete agreements contained in employment contracts are closely scrutinized against employers due to the significant interest in competition and the concerns regarding the impact of enforcement upon on an individual and his or her family. The attorneys at Maginnis Howard understand the significant impact a non-compete agreement can have on an employee’s ability to provide for their family. We assist employees in avoiding the effects of such 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.