Does North Carolina Enforce Non Compete Agreements
In the analysis of temporal and territorial constraints, it is important to remember that these two concepts should not be considered independent of each other, but rather „each must be taken into account in determining the adequacy of the other.“ 7 For example, in Market America, Inc. v. Christman-Orth, the court found that the employment restriction covers the entire United States.8 Despite this vast geographic area, the court has always found the Confederacy an appropriate restriction on trade.9 In the case of CNC/ Access, Inc. v. Scruggs, however, the court reached an agreement not to compete that limited employment in the state of North Carolina is an inappropriate restriction of trade.10 The seemingly inconsistent results of these two cases can be reconciled by the different time limitations contained in each contract. In Market America, Inc., the national restriction was limited to six months11, while in CNC/Access, the national restriction lasted three years.12 Therefore, the results are not inconsistent in these cases, as the time and territory requirements are linked and must be considered „in tandem.“ 13 While the following data may provide direction in determining authorized time or territorial restrictions, it is important to ensure that all employment restrictions are used as appropriate means to protect the legitimate business interests of the employer. The use of „alliances, no competition“ or „non-competition agreements,“ which prevent former employees from working for a competitor, is gaining popularity and is used in a wide range of industries and service providers. Although increasingly popular, non-competition bans are not unchallenged. A recent case involving a nursing staff company shows the North Carolina courts` aversion to excessive restrictions. In this case, the non-competition agreement prohibiting the nurse from working for another care service not only limited the nurse to providing care services to the new employer. The Tribunal found that, because language could be understood to prevent the former employee from providing food preparations or secretarial services or other services that had nothing to do with the employer`s affairs, and the nurse`s agreement prohibiting cooperating with clients of a later employer, and not just cooperating with those to whom the former employer assigned the nurse to work, the non-competition agreement was deemed unfeasible.
To be applicable under North Carolina law, there must be a non-compete clause between the employer and the worker: In VisionAIR, Inc. James, 167 N.C approximately (2004), the non-competition agreement stipulated that the worker could „not own, administer, be employed, or participate in a business similar to that of the employer. „South-East,“ two years after his work stoppage at VisionAIR ended. The Tribunal found that the contract would not only prevent the worker from doing work similar to VisionAIR`s, but would be prevented from carrying out work, even completely inconsistent, in a company such as VisionAIR. In addition, the Tribunal found that by preventing the worker from owning, even indirectly, a similar business, the worker may even be prohibited from holding shares in an investment fund that is partly invested in a company similar to that of VisionAIR. The Tribunal found that such extensive restrictions could not be applied. It is therefore essential that you have a judge willing to use the necessary heavy leverage and analyze every word of the competition to determine whether the language actually protects a legitimate commercial interest or whether the agreement is outdated and unworkable.