Generally speaking, in North Carolina, a covenant not to compete means that the employee will agree not to work for any of their employer's competitors upon leaving the company. Such agreements are also known by the term "non-compete clauses". Employees who sign them may either receive compensation or simply be required to agree as a condition for their employment.

When are Covenants not to Compete Unenforceable?

Whether or not a judge will conclude that the covenant is enforceable can be difficult to know beforehand. Although the interests of employers are important, courts in North Carolina also give priority to an employee's freedom to choose the type of employment that they desire. As a result, courts usually uphold only those covenants that are consider to be reasonable according to the circumstances. A court will normally hold non-compete clauses to be unreasonable if they involve unusually long periods of time or if they cover a geographic region surrounding Shelby that is excessively large.

Covenants must also be limited to restricting dealings with those competitors that are rationally related to the employer's industry. Finally, an employer is required to have a valid business reason in its motivation for imposing a covenant not to compete on an employee.

Do I Need an Attorney when Dealing with a Covenant not to Compete?

Before you sign any agreements that could restrict your rights, you may consider hiring a Shelby, North Carolina attorney who can review the covenant. The attorney can negotiate modifications to the contract if they are needed, and can draft a new clause which is acceptable to the parties involved. Attorneys can provide valuable counseling to employers who are considering suing an employer who breached a covenant not to compete. They can also assist employees who have signed an agreement limiting their employment options.