If you are not in California (where Covenants Not To Compete are effectively worthless) there is, generally speaking, a 3 prong test: Given the industry involved, is the Covenant reasonable in terms of time limit, job functions or descriptions prohibited, and geographic reach. Thus, a radio DJ job may have a greater geographic reach than a hair stylist’s job (e.g., 50 miles v. 5 miles). Similarly, the radio DJ job could be shorter duration (say 6 moths) than the stylists (maybe 1 year). A careful analysis of the job function/description is also important. Just because you signed a Covenant Not To Compete when you were a salesperson you may not be prohibited from beings a Sales Manager. Or vice versa. Bottom line: Each case should be carefully analyzed and the legal precedents for that industry should be studied.
How Do You Determine Reasonableness Of A Covenant Not To Compete?
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