In December 2019, the Economic Policy Institute (EPI) released a report that revealed a continued increase in the use of non-competition agreements in the workplace. According to the EPI study, between 36 and 60 million American workers have entered into non-competition agreements that, to varying degrees, would operate to preclude the employee from accepting employment with or providing services to a competitor. However, the landscape for whether a non-compete agreement is enforceable is consistently changing under specific state laws. Nonetheless, while non-competition laws may vary from state to state, several common requirements are present in most state’s analyses of enforceability.
The use of non-compete (or non-solicitation) agreements by employers may provide great benefit to an employer by preserving the quality of the employer’s workforce, protecting the integrity of confidential and trade secret information, and preventing unfair competition in the marketplace. However, state-specific requirements and ever-changing statutory and common law standards make it more important than ever to carefully tailor and draft these agreements to ensure the best chance of enforceability.