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Occasionally, an employer may conclude that it is in its best interests to try to limit employees from engaging in post-employment conduct harmful to its business. This is commonly done with agreements which restrict former employees from diverting business or co-workers, or using or disclosing proprietary and confidential business information. Agreements which contain such “restrictive covenants” are sometimes referred to as “non-compete agreements.”
The field of non-compete agreements has faced quite a few legal challenges and limiting trends in the last few years. Also, the extent to which an employer can use non-compete agreements is heavily dependent on the state where the employer and the employees are located. It is important for employers to understand what terms are currently acceptable where they are located and how the law may change.
What is a non-compete agreement?
The term “non-compete agreement” refers to an agreement containing one or more covenants restricting post-employment activities. One such covenant would restrict a former employee from engaging in the same kind of work for himself or another employer within a “reasonable” geographic area during a specific “reasonable” period. What is reasonable to a court is met with the very unsatisfying answer, “it depends.” Other typical restrictive covenants create prohibitions on the solicitation of customers or employees.
State laws
South Carolina courts evaluating the validity of...
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