Non-Compete Agreements Vary Widely From State to State

(This is the first 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)

Either by statute or court decisions, noncompetition provisions in employment agreements are often treated differently than noncompetition agreements related to the sale of a business. Essentially, all states consider keeping individual employees from working as a restraint of trade. Unless you meet the requirements of the particular state, employment noncompetition provisions will not be enforced. Because non-competition agreements are a restraint of trade, where a statute exists many states take a strict construction of the drafting and enforceability of a non-compete agreement. For example, in Louisiana the actual parishes must be listed. Also, you can only include parishes where the employer is actually doing business.