Our Charleston commercial litigation lawyer
has realized that rapid technological innovation, mobility and the speed such information is able to be circulated in commerce has led businesses both big and small to become increasingly worried about protecting its intellectual property rights through the use of a restrictive covenant
. In an employee-employer situation, businesses struggle to keep their trade secrets hidden after employees leave the employer to go to work for their competitors or to start their own business. Both business organization
and South Carolina courts recognize that employee knowledge and mobility increases the chances that vital trade secrets will be misappropriated. A restrictive covenant is a business contract
that is developed for an employee so he or she will not engage in certain post-employment activities.
The typical restrictive covenant our Charleston corporate litigation attorneys defend and enforce for our business clients and business professionals include:
South Carolina Public Policy
If a covenant limits or unnecessarily restricts post-employment competitive activities, then it will be disfavored in South Carolina. There are limited exceptions to this South Carolina public policy, however, when the covenant is necessary to protect the legitimate business interest of employers or entrepreneurs.
Legal Factors Analyzed by South Carolina Courts
Is the covenant necessary for the protection of the legitimate interest of the employer;
Is the covenant reasonably limited with respect to time and geographic location;
Whether the covenant is unduly harsh and oppressive on the employee;
Whether the covenant is reasonable from the standpoint of South Carolina public policy; and
Whether the covenant was supported by valuable consideration.
It should be noted that South Carolina courts will strictly construe restrictive covenant, such as noncompete agreements. For instance, South Carolina courts have found that non-competition agreements have the potential to impose unnecessary restraints on trade and post-employment opportunities, thus the agreements are carefully scrutinized and strictly construed.