---
title: Non-Compete Agreement Enforceability
description: An overview of the legal standards and considerations for enforcing non-compete agreements.
keywords: [non-compete, restrictive covenants, employment law, contract law, trade secrets]
category: law
---

## Introduction to Non-Compete Agreements

Non-compete agreements are contractual provisions that restrict an employee's ability to work for a competitor or start a competing business after their employment ends. These agreements are intended to protect an employer's legitimate business interests, such as trade secrets, customer relationships, and investments in employee training. However, non-competes also implicate an individual's right to earn a living and the public's interest in free and open competition. As a result, the enforceability of non-compete agreements is subject to significant legal scrutiny.

## Legal Standards for Enforcing Non-Competes

The enforceability of a non-compete agreement is generally determined by a multi-factor test that examines the reasonableness of the restriction. Under the seminal case of *Purchasing Power, LLC v. Bluestem Brands, Inc.*, 851 F.3d 1218 (11th Cir. 2017), courts will consider the duration, geographic scope, and the nature of the restricted activity to assess whether the non-compete is no broader than necessary to protect the employer's legitimate business interests. The employer bears the burden of proving that the non-compete is reasonable.

Additionally, many states have enacted statutes that further regulate non-compete agreements. For example, the Uniform Trade Secrets Act, adopted in 47 states, permits non-competes only to the extent necessary to protect an employer's trade secrets. Similarly, California Labor Code § 16600 establishes a general prohibition on non-compete agreements, with limited exceptions. Employers must carefully analyze the applicable state law when drafting and seeking to enforce non-compete provisions.

## Legitimate Business Interests

To establish the reasonableness of a non-compete agreement, an employer must demonstrate that it has a legitimate business interest that the non-compete is designed to protect. Legitimate interests can include the protection of trade secrets, customer relationships, and investments in employee training and development. However, courts are generally skeptical of non-competes that are intended solely to prevent competition or restrict an employee's mobility.

In *Extended Stay America, Inc. v. Meirick*, 495 F. Supp. 3d 1237 (M.D. Fla. 2020), the court found that the employer had a legitimate interest in protecting its customer relationships and confidential information. The non-compete, which prohibited the former employee from working for a competitor within a 50-mile radius for one year, was deemed reasonable in scope and duration.

Conversely, in *Hetronic International, Inc. v. Hetronic Germany GmbH*, 2020 WL 2467073 (W.D. Okla. 2020), the court refused to enforce a non-compete agreement that was primarily intended to stifle competition, rather than protect the employer's trade secrets or customer relationships.

## Geographic and Temporal Scope

The geographic and temporal scope of a non-compete agreement are critical factors in the reasonableness analysis. Courts will generally enforce non-competes that are limited to the geographic area in which the employee had access to the employer's confidential information or customer relationships. Overly broad geographic restrictions, such as nationwide or global prohibitions, are more likely to be deemed unenforceable.

Similarly, the duration of the non-compete must be tailored to the legitimate interests at stake. Reasonable time periods are typically one to two years, depending on the industry and the nature of the employee's role. Lengthier restrictions are more likely to be viewed as an improper restraint on trade.

In *Pinnacle Performance, Inc. v. Hesting*, 909 N.W.2d 427 (Neb. 2018), the court upheld a non-compete agreement that prohibited the former employee from working for a competitor within a 50-mile radius for one year. The court found this scope to be reasonable given the employee's access to the employer's customer information and trade secrets.

Conversely, in *Bankers Life and Casualty Co. v. Miller*, 515 F.3d 1203 (11th Cir. 2008), the court refused to enforce a non-compete with a nationwide geographic scope and a five-year duration, concluding that it was overly broad and constituted an unlawful restraint on trade.

## Remedies for Breach of Non-Compete

If a court determines that a non-compete agreement is reasonable and enforceable, the employer may be entitled to various remedies for a breach by the former employee. These can include:

1. Injunctive relief: The employer may seek a temporary restraining order or preliminary injunction to prevent the employee from working for a competitor or engaging in other prohibited activities during the non-compete period.

2. Damages: The employer may be able to recover monetary damages, such as lost profits or the value of the employee's services during the non-compete period.

3. Forfeiture of compensation: In some cases, courts may order the employee to forfeit compensation, such as severance payments or equity awards, that was contingent on compliance with the non-compete.

4. Attorneys' fees and costs: Prevailing employers may be able to recover their reasonable attorneys' fees and court costs incurred in enforcing the non-compete agreement.

The specific remedies available will depend on the terms of the non-compete agreement, as well as the applicable state law.

## Conclusion

Non-compete agreements are complex legal instruments that require careful drafting and analysis to ensure enforceability. Employers must demonstrate that the non-compete is reasonable in scope and duration, and is necessary to protect legitimate business interests. Failure to meet this standard may result in the non-compete being deemed unenforceable, leaving the employer without the desired protection. By understanding the legal framework governing non-competes, employers can better navigate this area of employment law and safeguard their competitive position.