Noncompete agreement not necessarily ironclad

by William M. Corrigan

for the Business Journal

In today's business climate, the use of noncompete agreements is increasing. Successful employees are often in high demand and want the option to work for the highest bidder. A noncompete agreement can help management protect the business from key employees who leave to compete against them.

Protection of the employer, not punishment of the employee, is the essence of the law. An employer cannot extract a restrictive covenant from an employee merely to protect himself from competition. Employers must be able to show they are protecting either trade secrets or customer contacts. These two interests are usually at the heart of litigation over a noncompete agreement.

The law recognizes a variety of trade secrets, such as a formula for a chemical compound[[In-content Ad]]