Non-Compete Agreements in North Carolina – Raleigh Non-Compete Attorney
It’s important to know if you are agreeing to an enforceable non-compete agreement under North Carolina law and what exactly the non-compete forbids. We can review a North Carolina non-compete with you and help you negotiate one that is fair. North Carolina Non-Compete Agreements or “Covenants Not to Compete” are usually enforceable if certain requirements are met:
Writing
First, non-competes must be in writing.
Consideration
Second, they must be supported by consideration. If you are at the start of employment, continued employment is sufficient. If you are at another point of employment, you have to have something besides continued employment to be sufficient.
Time and Territory
Third, covenants must be reasonable as to time and territory. This includes a geographic reference, and the following factors are considered in determining reasonableness: (1) the area, or scope, of the restriction, (2) the area assigned to employee, (3) the area in which the employee actually worked or was subject to work, (4) the area in which the employer operated, (5) the nature of the business involved, and (6) the nature of the employee’s duty and his knowledge of the employer’s business operation.
Employment Contract
Fourth, covenants have to be part of an otherwise valid employment contract.
Legitimate Business Interest
Fifth, covenants have to be designed to protect a legitimate business interest. To analyze this requirement, we ask if the nature of the employment brings the employee in personal contact with patrons or customers of the employer. If not, we ask if the nature of employment allows him to acquire valuable information as to the nature and character of the business and the names and requirements of the patrons or customers. If the answer to both of these questions is no, then there is not a legitimate business interest. If either answer is yes, then we must ask if this contact or information enables him to take advantage of such knowledge of or acquaintance with the patrons and customers of his former employer and gain an unfair advantage. If so, equity will interpose on behalf of the employer and restrain the breach.
Public Policy
Sixth, the covenant cannot violate public policy. A court cannot rewrite a covenant to be reasonable unless it is stipulated in the employment contract.
At Hopler & Wilms, we can help you draft, review, or negotiate a North Carolina non-compete prior to employment or as part of a severance package.
