Breach-of-Noncompetition-AgreementWhen 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.

A breach of noncompetition agreement occurs when an employee breaks their contractual promise not to engage in certain behavior that may be harmful to the employer’s interests. For example, a noncompetition agreement will typically state that an employee agrees not to enter into or start a similar profession or trade that will be in competition against the employer for a specific duration.
Even though the employee agrees to execute the noncompetition agreement, he or she could ultimately commit a breach of noncompetition agreement once they resign or are terminated. This is where our Charleston commercial litigation, breach of noncompetition agreement, and breach of employment agreement lawyers come in.

Whether you are a business, an employer or an employee, our Charleston litigation attorneys are ready to help you determine if your noncompetition agreement is enforceable. We consider numerous factors when determining whether or not the noncompetition agreement can be enforceable. Some of the factors that we will consider include:

  • Duration of the prohibition (must be reasonable in time)
  • Geographical scope of the prohibition (must be a reasonable in geographical scope)
  • Did the employer give adequate compensation for the agreement
  • Did the employee receive adequate compensation for the agreement
  • Was tangible employer property, such as customer lists, documents showing confidential informationIf, with respect to trade secrets, is the information known outside the employer’s business or can it be easily foundIf, with respect to customers, is the employer’s relationship near-permanent and did the employee have contact with customers

A number of factors need to be considered hinging on the scope of the noncompetition agreement, the particular facts and circumstances which surround the employment, and the type of business involved. If you need advice regarding a noncompetition agreement, contact our Charleston commercial litigation attorneys.