What standard governs workplace noncompete agreements?

by | Sep 19, 2019 | Employment Law |

Here’s a potential scenario that spells a bona-fide concern from a Delaware employer’s perspective: A top employee has just left the firm, and company principals fear that the worker will divulge closely kept trade secrets to a rival company.

And here’s a tandem scenario, but from the viewpoint of a just-departed employee: I want to start my own business, but my ex-employer is threatening to limit my ability to do so via legal action against me.

Employers and workers have a reciprocal relationship marked by shared aims yet sometimes conflicting interests. We noted that in our immediately preceding blog post at the established Wilmington employment law firm of Martin D. Haverly. We stressed in our September 16 entry that valued workers often quit their jobs and take positions with new employers, taking learned skills and prior know-how with them.

Understandably, that concerns ex-managers, who want to adequately protect against the subsequent disclosure of safeguarded data and processes to competitors (and, additionally, against former workers who begin to compete directly against them).

Legally, they can do so through the timely execution of noncompete agreements with those workers. As we noted in our above-cited blog entry from earlier this week, courts will evaluate those contracts pursuant to a reasonableness standard.

What does that mean?

In a nutshell, reasonableness is measured in terms of scope, namely, geographical and time restrictions that can lawfully be imposed on an ex-worker following job termination. For example, a court might deem it reasonable to bar a former employee from setting up shop immediately and 10 miles down the road from a former employer. The likelihood of such a ban would progressively decrease commensurate with longer time and locale constraints.

Noncompetes are obviously key employment contracts in many worker-employer relationships. Questions or concerns regarding their negotiation, drafting and enforcement can be directed to a proven employment law attorney.