What are non-compete agreements? | North Carolina Business Litigation Lawyer

A non-compete agreement is a document where a party restricts another party’s right to compete within a market. The agreement restricts the area a company can utilize for a specific amount of time. Non-compete agreements are highly disfavored in North Carolina law, resulting in a fair amount of litigation.


Transcription

Keith Whited: Non-compete agreements are highly disfavored in North Carolina. Covenants not to compete and agreements not to compete are disfavored by the law, and the idea for that is pretty simple: that the law doesn’t want to allow a party to restrict any other party’s right to make a living. When you say you can’t compete, it means somehow we’re going to restrict you. So the North Carolina Supreme Court, over a long line of cases, has restricted both the scope—that is, the area the non-compete can be in—and the length of time, so it is limited by scope and time, and they have to be reasonable. They have to be reasonably related to the business you’re trying to restrict. They are highly disfavored in the law, and there is a fair amount of litigation over whether they were appropriate to begin with.

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