A number of employers will utilize restrictive covenants such as having employees sign confidentiality, non-competition and non-solicitation agreements upon hire. When the employee leaves, the employer will enforce the agreement against the employee. Let us assume an employer had an employee sign a non-competition agreement that restricted the employee from working for a competing employer within a 30 mile radius of where the employee last worked for the employer and for a duration of two years. If this restrictive covenant essentially means the employee would need to relocate or commute to work over one hour one-way every day to get to an employer that is far enough away not to violate the covenant, would you deem it to be too restrictive? Why, or why not
When the court analyzes these types of agreements, they use a reasonableness standard, which is the same standard we would want to apply in this case. We have to ask additional questions to determine if the agreement or covenant is reasonable. We need to consider the type of industry. How competitive is this industry? We would also need to consider the population of the area in relation to the mile radius. Let's look at a few examples. If this is a business consulting firm in a ...
This solution thoroughly discusses non-compete agreements and restrictive covenants.