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Restrictive Covenants

Restrictive Covenants in Employment Agreements

 

On a number of occasions, we have written about restrictive covenants appearing in employment agreements. The restrictive covenants that are often contained are provisions like non-competition agreements, trade secret protection, non-solicitation provisions, and confidentiality provisions. See our blogs from September 2016, January 2017, and January of this year.

 

The Business Courts in Wake County and Mecklenburg County have recently issued opinions that involve cases stemming from employment agreements with restrictive covenants. These opinions reiterate what we have often found to be the case and have so advised clients, both on the employee and the employer side.

 

First, customer lists are generally not protected and will not constitute trade secrets. The explanation behind this decision is relatively straightforward – generally a customer can easily be identified by an outsider.

 

Second, it is rare that an employer can successfully prohibit an employee from taking “any” job with a competitor. Doing so is simply overbroad and the courts will not enforce a covenant not to compete that is too broad. While an employer may be able to prevent a former employee from taking a job that is very similar to the job previously performed, much beyond that is not going to work.

 

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