State Laws Governing Noncompete Agreements May be a Trap for the Unwary

As discussed previously, noncompete agreements can be a powerful tool to help employers protect their confidential, proprietary or trade secret information from disgruntled departing employees.  However, the differing requirements imposed by state laws applicable to noncompetition agreements can cause unforeseen problems for employers seeking to enforce these agreements in multiple states.  For example, some states permit courts to "blue pencil" or amend unenforceable portions of otherwise enforceable agreements, while other states prohibit such amendments.  Additionally, in some states, such as California, covenants not to compete are illegal because they violate public policy by limiting open competition and employee mobility.

To assist employers in navigating the requirements of the various state laws, FordHarrison attorneys have prepared a 50-State Survey of Noncompete Laws highlighting the significant provisions of these laws.  If you would like a copy of the survey, please contact the FordHarrison attorney with whom you usually work or the attorneys who prepared the survey.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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