Non-CompetePosted: January 19, 2012
Employers often have new employees execute non-compete agreements upon hiring. As their name implies, these agreements
serve to discourage employees from learning about a business, including its customer list, then leaving to work for or start a competitor.
The Nebraska Supreme Court ruled that non-competes must be “reasonable in scope”, or the Court will simply invalidate the entire agreement. (Non-competes are not subject to “savings clauses”, which state that if one provision of a legal document is invalid and unenforceable, the remaining provisions remain valid and enforceable.)
If Dick signs a non-compete with his new Company that states, “If Dick terminates his employment for any reason, he may not compete against Company for the rest of his life anywhere on the planet.” That’s overbroad and therefore invalid and unenforceable.
So what’s “reasonable in scope”?
How about this: “If Dick terminates his employment for any reason, he may not compete against Company for a period of two (2) years within fifty (50) miles of Company’s principal place of business by contacting Company clients with whom he had direct contact during the course of his employment with Company.” That non-competition provision is “reasonable in scope”, valid, and enforceable.
That ends today’s fireside chat. Speaking of fire, please flame away at my legal analysis if I mis-typed.