Non-compete agreements are a popular tool used by employers to protect their business interests. However, the laws surrounding non-compete agreements can vary significantly between states. In Delaware, non-compete agreements are generally enforceable, although there are some restrictions and limitations.
What is a Non-Compete Agreement?
A non-compete agreement is a contract between an employer and an employee that restricts the employee`s ability to work for a competing business after leaving their current employer. These agreements are typically used to protect a company`s trade secrets, confidential information, and customer relationships.
In Delaware, non-compete agreements are generally enforceable, but they must be reasonable in their scope and duration. This means that they cannot be overly restrictive or unfair to the employee.
Restrictions on Non-Compete Agreements in Delaware
There are several restrictions on non-compete agreements in Delaware that employers need to be aware of. First, the agreement must be supported by valid consideration, such as a signing bonus or a promotion. If the employee is not given any additional benefit for signing the agreement, it may be unenforceable.
Second, the agreement must be reasonable in its scope and duration. This means that it must be limited to a specific geographic area and time frame. For example, a non-compete agreement that prevents an employee from working for any competing business in the entire state of Delaware for five years would likely be deemed excessive.
Third, the agreement must not be contrary to public policy. In Delaware, this means that non-compete agreements cannot be used to prevent employees from pursuing their chosen profession or trade. If the agreement is too restrictive and prevents the employee from finding work in their field, it may be unenforceable.
Enforcing Non-Compete Agreements in Delaware
If an employer wishes to enforce a non-compete agreement in Delaware, they must file a lawsuit against the employee. The court will then determine whether the agreement is reasonable and enforceable. If the court finds that the agreement is overly restrictive or unfair to the employee, it may be deemed unenforceable.
Conclusion
Non-compete agreements can be an effective tool for employers in Delaware to protect their business interests. However, employers must ensure that the agreement is reasonable in its scope and duration, supported by valid consideration, and not contrary to public policy. If you have questions about non-compete agreements in Delaware or need assistance drafting an agreement, consult with an experienced attorney.