"Should I have my employees sign a non-competition agreement?" This is a critical and increasingly controversial question for many employers. With the legal landscape around non-competes in flux, understanding your rights and the enforceability of these agreements is more important than ever.
In this video, Phil Crowley, founder of Crowley Law LLC and a seasoned corporate lawyer, tackles the complexities of non-competition agreements (NCAs). He discusses the (then-current) proposed rules by the U.S. Federal Trade Commission (FTC) aiming to ban most non-competes and the potential for those rules to be challenged or overturned in the courts.
Phil breaks down the core aspects of non-competition covenants, including:
What they are: Agreements restricting employees from engaging in activities that compete with their employer for a specific period after employment ends.
The General Rule for Enforceability: For a non-compete to be upheld by courts, it typically must be reasonable in:
Time: The duration of the restriction can't be excessively long.
Scope: The activities restricted should be limited to those the employee was genuinely engaged in and not overly broad.
Geographical Extent: The territorial limitation must be appropriate to the business's actual reach (e.g., a local business likely cannot enforce a nationwide ban).
Why Proper Drafting is Crucial: Courts regularly enforce non-competition agreements that are carefully and reasonably drafted to protect legitimate...
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