Employment Law

Non-Compete Agreements

Generally, Indiana courts are willing to uphold a reasonable agreement not to compete even though such an agreement can be seen as being a restraint of trade.  However, the agreement must be reasonable as to the geographical limitation, time limitation and scope of work prohibited.  Moreover, an Evansville employment attorney will tell you that certain interests of employers have been found by the courts to be protectable, including an employer’s trade secrets, the prevention of the solicitation of customers, customer goodwill, and the investment in special techniques or training. Nonetheless, an employer does not have an interest in guarding relationships with previous customers who have decided to do business elsewhere, nor does it have an interest in keeping its employees from soliciting its customers’ customers.

You should know that non-compete agreements will be found to be reasonable only when the restraint is not against public policy and it is reasonably necessary to protect the employer and not unreasonably restrictive against the employee. Specifically, a non-compete agreement will be deemed to be reasonably necessary if the employer can demonstrate that the former employee has obtained a distinct competitive advantage or an ability to harm the employer. Simply stated, the employer must show that there is a valid reason for why it would be unfair to allow the former employee to compete with it.

An Evansville employment attorney knows that it is not unfair to the employer if the employee competes against it with any information that is public knowledge, or by using any standard administrative skills or general knowledge, information or skills, even if they were obtained during the course of his or her employment with the business.

Please note that if a non-compete agreement is excessively broad in its prohibitions, the court will generally rewrite the agreement rather than choose not to enforce the agreement. In fact, in cases where an agreement has clear and readily-severable requirements, and some of those requirements are valid while others are not, the courts will apply what is known as the “blue pencil doctrine” to strike out any invalid provisions and enforce the ones that are valid.