In South Dakota, a covenant not to compete generally requires that, upon leaving the company, an employee agrees not to be employed by their employer's competitors. A covenant not to compete may also be called a "non-compete clause". An employee who signs a covenant not to compete can receive compensation for the agreement, or in some cases the agreement is a condition for their being hired.

When are Covenants not to Compete Unenforceable?

Foreseeing whether or not a judge will uphold a covenant not to compete is generally difficult. Even if the employee's interests may be significant South Dakota courts will certainly assign great weight to a person's freedom to choose the type of employment that is suitable for them. Accordingly, only those covenants which are deemed to be reasonable will be upheld by the court. A court will usually hold non-compete clauses to be unreasonable if they involve unusually long periods of time or if they cover a geographic region surrounding Aberdeen that is excessively large.

Covenants not to compete are also required to deal only with competitors who are reasonably related to the employer's line of industry. Finally, the employer must have a legitimate business interest behind its motivation for mandating a covenant not to compete.

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

Since covenants could restrict your rights, you may wish to hire a Aberdeen, South Dakota lawyer to review any documents. They will be able to negotiate further changes to the covenant, and can draft an entirely new one that is acceptable to all parties if needed. Employers can receive useful advice from an attorney should they decide to sue a worker for breaching a covenant, and employees who have signed such covenants can also benefit from a lawyer's counseling.