Current societal and legal perceptions alter the enforceability of non-compete agreements, which poses new challenges for business owners trying to protect their interests. A non-compete agreement protects your place in the industry amongst your competitors by preventing workers from taking knowledge of your business to a competitor right away after workplace separation.
Combat the non-compete enforcement crackdown by ensuring that your agreement complies with the court’s requirements.
Hourly employees are exempt from non-compete agreements
Nevada’s laws on non-compete agreements prevent employers from binding hourly employees to these contracts. The courts may refuse to enforce any non-compete agreement signed by an hourly employee to stop the interference of low-level workers seeking better pay and job improvement.
Businesses must be reasonable in establishing restrictions
Restrictions defined in a non-compete clause may only limit things deemed absolutely necessary to protect the integrity of the business. For example, employers cannot prevent workers from seeking employment beyond the company’s immediate competitive territory or for several years after the separation of employment.
Employees may not suffer undue hardship from a non-compete agreement
The court considers the hardship posed by any non-compete agreement in determining enforceability. If the non-compete agreement prevents an employee from seeking any work in their chosen industry for a defined period of time or carries a valid term that the court deems excessive, it may rule the agreement unenforceable.
Focus on reasonability, fair restrictions and only those limitations that prove necessary to protect your business. Non-compete agreements that prioritize these factors are more enforceable than others.