(This is the second of four posts discussing current issues with non-competition agreements that cross state lines. Companies and legal counsel must be sure to craft these agreements carefully. As I will explain in my fourth and final post of this series there is no “standard” agreement that can be used all the time regardless of the states involved. — Keith Sieczkowski)
The parties’ Choice of Law provisions generally are enforceable unless the court decides that to do so would be a violation of the public policy of the state. The cases in the various states I’ve recently reviewed that have specific noncompetition statutes, including Texas and Louisiana, have all held that the public policy of the state is found in the statute. So, regardless of the parties’ Choice of Law provision, states generally apply their own state law when deciding if a non-compete is enforceable within its borders. For multi-state companies, this is really a burden would have to be considered when drafting enforceable non-competition agreements.