Covenants Not-to-Compete (Non-Competition Agreements) / Restrictive Covenants

In recent years, the use of covenants not-to-compete has been on the rise among U.S. businesses. These agreements, also known as non-competition agreements or non-compete clauses, serve as contracts between employees and employers to ensure that the former does not enter into competition with the latter during and at the conclusion of employment.

While these kinds of agreements were once limited to top executives, today they can be found at all levels of the corporate ladder and in a broad array of industries and organizations. Employers use these agreements to protect sensitive information, technologies, processes and intellectual property.

As with other types of restrictive covenants, an employer attempting to enforce a covenant not-to-compete has the burden of demonstrating its necessity in protecting legitimate business interests. Courts expect evidence that the enforcement of the agreement is not merely used as punishment of the former employee for having left employment. These agreements are expected to be limited in both duration and geography so as not to impose unreasonable restraints on the former employee’s livelihood.

The use and enforcement of covenants not-to-compete can be both complicated and, occasionally, controversial. Our experience will help you navigate the complexities of these and other matters related to employment law.

For more information, please contact David P. Weiss at 314.561.5078.