Non-Compete Agreements: When Are They NOT enforceable?

  • Too long a time
  • Too large a geographic territory
  • Too broad a definition of secrets
  • Failure to define protected confidential information
  • No agreement at all
  • Thinking “one size fits all” – the same agreement does not apply to all employees
  • Choice of law points to the wrong state
  • Trying to restrict all employees from working in their field

Preparing effective non-competition agreements is possible when an employee has access to confidential marketing and customer information. The agreement must be a limited in time and geographic area and does not unfairly restrict competition - allowing for protection of an “employer’s competitive business interests”.

A Judge enforced a non-compete agreement when an employee was prohibited contacting customers for 12 months and there was no geographic boundary at all! Mid-Michigan Medical Billing Service, Inc. v Williams

Here a Judge struck down a non-competition agreement when we demonstrated, at trial, that the employee took no confidential information and had a right to make a living selling insurance. 

Call (248) 643-9530 during business hours or email for a consultation.

Confidentiality and Non-Disclosure Agreements. What information can be protected?

  • Trade Secrets
  • Customer Lists and contact information; Supplier contact information
  • Marketing and Product Strategies
  • Financial and Business Information
  • Know how; testing methodology
  • Technical Data and Specifications

How long can it be protected?  As long as it is not in the public domain - a long, long time. Courts will enforce well-written and fair agreements to protect employers against the theft of confidential information.

When to sign it?  Technological advances have now provided employees greater access to sensitive data, and easier means to copy it. Require your employees to sign Confidentiality and Non-Disclosure Agreement on their first day of employment.

Call (248) 643-9530 during business hours or email for a consultation.

Home     |    Business Law     |    Labor & Employment     |    Probate & Estate Planning     |    Litigation     |     Real Estate     |     Contact     |    Attorneys     |    Blog