Employers may find it increasingly difficult to protect customer relationships built on their dime as more states enact enhanced restrictions on non-compete agreements, or even bar them altogether. While employers may want to protect their investment by having employees sign agreements that restrict them from working for competitors or servicing the same customers once the employment relationship ends, such agreements are governed by state law and enforcing them is increasingly challenging. Employers seeking to use the same agreement for employees in multiple states face added challenges because of significant differences among state laws.

Several states, including but not limited to California, North Dakota, and Oklahoma, generally will not enforce non-competes. Many states, including but not limited to Arizona, Connecticut, Florida, Georgia, Indiana, Iowa, Massachusetts, Minnesota, Nebraska, New Hampshire, New York, Ohio, and Pennsylvania, allow non-compete agreements as long as they are no broader than necessary to protect the employer’s legitimate business interests. Still, even these states have specific, particularized requirements for enforcing non-compete agreements.

For instance, in Massachusetts, to be valid and enforceable, a non-compete agreement must be supported by a “garden leave clause” or other mutually-agreed upon consideration between the employer and the employee. The Massachusetts law defines “garden leave clause” to mean a provision within a...

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