Five HR Errors That Can Invalidate a Non-Compete Agreement

Human Resource Executive Online

David J. Clark, Senior Counsel in the Litigation and Labor and Employment practices, in the firm’s New York office, authored an article in Human Resource Executive Online, titled “Five HR Errors That Can Invalidate a Non-Compete Agreement.”

Following is an excerpt:

Non-competition agreements are increasingly prevalent in today’s business world, but they remain disfavored under most states’ jurisprudence because they may impinge, sometimes drastically, on an individual’s ability to earn a living.

Enforcement by employers of non-competition agreements against former employees can be an uphill battle in the best of circumstances–even when they are narrowly drafted to protect the employers’ legitimate business interests, and are reasonable in terms of geographic scope and duration.

So imagine the frustration of employers if a non-compete covenant which otherwise might stand a good chance of being enforced is torpedoed by a simple error made months—or years—earlier in the employer’s human resources department, which invalidates the restriction and prevents its enforcement.

The following are examples of these sorts of errors reported in court decisions, in which the individual is able to walk away from a non-compete provision—scot-free and on a technicality, as it were. Perhaps more than anything, these cases show that implementation of human resources best practices and even just a little more attention to detail can go a long way.