Noncompetition, nonsolicitation, and confidentiality agreements (also referred to as restrictive covenants) are becoming increasingly common in today’s business world.
These agreements are found in just about every profession and industry imaginable (e.g., professional services, information technology, sales, recruiting, entertainment, food service…even professional wrestling).
There are a few important points to keep in mind when it comes to noncompete agreements and other types of restrictive covenants:
- For business owners, restrictive covenants can play an important role in protecting valuable business assets.
- For employees, restrictive covenants can have a significant impact on the course of their professional careers.
- If not drafted carefully, courts may not enforce restrictive covenants in defense of strong public policies promoting free trade.
- When parties dispute the terms of a restrictive covenant, the judicial process can be very long and expensive and the cases are very fact specific (i.e., it is often difficult to predict outcomes or make broad generalizations in this area of law).