“Someone told me Noncompetes aren’t enforceable, is that right?” I’ve heard question many times over the years.   Here is how I typically respond. “Yes, they are enforceable, if they are written correctly.”  What does that mean?

To be enforceable in most states, a noncompetition covenant must be reasonable, both in terms of duration, as well as geographic scope. What is “reasonable” in this regard is determined by the particular industry, the nature of the employee’s work, and whether the noncompete is in the context of employment or in connection with the sale of a company. Longer noncompetes are more likely to be enforced against the seller of a business.  There are no “bright line” rules regarding the correct duration or geographic scope of a noncompete. Rather, reasonableness is determined by court decisions and the professional judgment of legal advisors.

How courts handle noncompetes that are not “reasonable” depends on the state where the contract is being enforced. In some states, courts faced with an unreasonable noncompete will simply toss out the noncompete in its entirety.  Judges in other states will modify the noncompete (referred to as “blue pencil”) to make it enforceable. You need to check the laws in your particular state.