It probably should be noted at the outset that non-compete agreements are issues under state law, although sometimes these agreements might implicate federal anti-trust statutes. In many cases, the law of non-compete is similar from one jurisdiction to the next; however, each state law is unique in varying respects. I am a South Carolina attorney. The statement of the law on this blog will generally based upon South Carolina law, and although it will be similar in other jurisdictions, local counsel should always be consulted with dealing with non-competes in other states.

Non-compete agreements, also referred to as “covenants not to compete” and/or a “noncompete” for short, contained in employment contracts are generally disfavored. According to the law, non-competes will be strictly construed against the employer, which means when doubts about interpretation will be resolved in favor of an employee. A non-compete will be upheld only if it is:

(1). necessary for the protection of the legitimate interest of the employer;

(2). reasonably limited in its operation with respect to time and place;

(3). not unduly harsh and oppressive in curtailing the legitimate efforts of the employee to earn a livelihood;

(4). reasonable from the standpoint of sound public policy; and

(5). supported by a valuable consideration.

* * * *

If a covenant not to compete is defective in one of the above referenced areas it is totally defective and cannot be saved.

Of course, this just begs the questions: What is necessary for protection of an employer? What is reasonable time for a non-compete? What is reasonable geographic scope of a non-compete? What is “valuable consideration?” What about client non-solicitation clauses? And can non-competes be rewritten to make it enforceable? And these questions lead to more, which lead to more, and well, you get the picture.

Just what the world needs: Another blog. Or blawg as legal blogs are known among law-geeks. But, I just could not help myself. I think non-competes, also known around here as “a ball and chain,” are bad for employees and bad consumers. Competition is stifled. Simply put, non-compete agreements put the interests of a few are put ahead of the interest of the many.

As a lawyer representing employees and entrepreneurs (to be), I am seeing more and more people who have signed a non-compete, which makes it impossible for them to make their best living. Rarely is their a legitimate trade secret to protect, and when there is, there is always a more fair way to do it. Many times, I have met with employees who had a non-compete sprung on them after they quit their previous job, after they moved their families from one state to another, and/or after they started the new job. More times than not, the employee sign the agreement under the threat of termination.

But, employees do sign them, which is always the best argument for enforcement. The argument for enforcement almost always includes some mention of “freedom of contract”; we must be sure to point out that non-competes impact many more than the parties to a contract. Enforcement of non-competes is an invisible tax, which helps distribute wealth from the many to the few. When private contracts impact public interests, enforcement becomes a matter of public policy. We all have a stake; we should have a say.

So, noncompete litigation is battle of ideas and a struggle of competing interests. This blawg joins that battle on the side of employees, entrepreneurs, and consumers. In the process, we will discuss the current trends in non-compete law as well as anticipating the direction of the law and economics of non-compete agreements. We will generate ideas that will help beat enforcement of restraints on trade: Looking for a pragmatic response to ideological arguments. We will also dabble in the common law history of non-competes. You cannot understand where we are at present if you don’t understand how we got here. Expect a dose of economics to be a part of our discussions as well. But, this blog will be a place where theory meets practice; lock meets key.