IS non-compete enforcable?
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IS non-compete enforcable?
I work for a large chemical company located in North Carolina. 14 years ago while living in Alabama, I signed a noncompete with my company. I later moved to north Carolina and the company was purchased by another company.
We have recently lost my largest customer due to pricing and I am afraid I will be out of a job or offered a position at a much lower compensation.
My noncompete states I can not work for a competing company and work in North America for 2 years after employment. My noncompete has a place for me to sign, a witness, and a company representative. The company did not have anyone sign the document. Will this be an enforceable document?
Asked on January 15, 2018 under Employment Labor Law, North Carolina
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 3 years ago | Contributor
Yes, non-competes are enforceable, and there is no need for the company to sign it: when person (or company) A gives an agreement to someone else to sign, the fact that person/company A provided the agreement shows that they agreed to it (they would not have provided it otherwise), meaning that no signature is necessary.
However, North Carolina and other states will only enforce non-cometition agreeents to the extent they are necessary to protect the employer's legitimate interests and are reasonable; courts will not enforce excessive terms (in regards to either length or geographic scope) and will "blue pencil" an agreement to reduce it to a reaonable level. A two year agreement is almost certainly excessive and unreasonable, unless you had been an owner of the company and signed the agreement as part of a sale to a buyer who then become your employer (when you are paid for your share or interest in a company, the courts regard a longer agreement as reasonable, in light of the money you received; and also regard the buyer as needing more and longer protection from someone who has shown they can create and run a competing company). Generally, non-owners may be tied up by noncompetes for 6 months to a year. It is also possible that North America will be viewed as too large a territory or geographic scope to be protected, though this depends on the industry and your job--i.e. did the employer compete continentally? Was your job so senior that you had contintent wide scope or authority? Etc. Generally, the protected area must relate to how much protection *this* company reasonably needs from *you*. So if you were to challenge this agreement, it may well be reduced in length and area. A good idea would be to bring the agreement to an employment law attorney to review with you (and review the facts of your job, your employer, its market, etc.) in detail, to get a better sense of the degree to which it may be enforced against you.