Non-compete agreements have been the source of much controversy. On the one hand, a business’s operational secrets deserve some level of protection. On the other hand, workers should be free to apply their talents wherever they please.
Some states have taken the extreme measure of effectively rendering non-compete agreements null and void. Others, like Connecticut, allow non-competes as long as they are considered reasonable. Of course, reaching a determination as to what is and isn’t reasonable is the stuff of legal arguments.
A five-part test
To help determine whether a non-compete agreement is reasonable, Connecticut law employs a five-part test. A court will look at:
- The duration of the restriction: As a rule of thumb, the longer the restriction, the less likely it is to be reasonable. That said, restrictions of a year or longer may be reasonable. It largely depends on the nature of the job in question.
- Geographic restrictions: Like duration, the greater the geographical reach, the less likely a non-compete will be reasonable. In other words, a global ban isn’t going to fly. Even a state-wide ban may be difficult to pass off as reasonable. Limiting the geography to a specific city or community is usually the best course of action.
- The fairness of the protection to the employer: A non-compete should reasonably and fairly protect a business’s interests. A toothless non-compete agreement is meaningless to an employer.
- The fairness of the protection to the employee: On the flip side, an employee shouldn’t be out-of-work forever due to a non-compete agreement.
- Interference with the interests of the public: The restrictions of a non-compete agreement cannot run contrary to the public’s interest.
If a non-compete agreement is found to be unreasonable under any of the five points, the agreement in whole is unreasonable. A legal professional can help protect your interests regardless of which side you are on in a non-compete agreement.