When there is a breach of noncompetition agreement
, the courts will normally enforce noncompetition agreements
when necessary to protect the interests of the employer. However, courts will not enforce noncompetition agreements that are ruled as overreaching or when there is no protectable interest is at stake, such as when the restrictions are unreasonable.
A noncompetition agreement is a restrictive covenant that is typically associated with an employment agreement. A noncompetition agreement is frequently incorporated as part of an actual employment agreement. It is a promise, called a covenant, by an employee not to engage in specific behavior that might be harmful to the employer’s interests. Under a normal noncompetition agreement, an employee agrees not to enter into or start a similar profession or trade that would be in competition against the employer for a specified timeframe.
The use of noncompetition agreements is based on the potential for the employee to have the ability to gain a competitive advantage upon termination or resignation from his employer. For example, upon termination or resignation, an employee might start his or her own business or even decided to go to work for a competitor. If there were no signed noncompetition agreement, the former employee has the opportunity to exploit confidential information, proprietary information, trade secrets and other sensitive information from the former employer.