Legal Question in Employment Law in North Carolina

I signed an "Employee Confidentiality Invention Assignment and Restrictive Covenant Agreement" before I started work. I am interested in working for a competitor but I want to know if I can. I was only employed for 5.5 months and need to support my family. Here is the "Non Compete" portion of the agreement...

Non-Solicitation and Non-Competition.

(a) Restrictions. During the term of Employee’s employment with the Company and for a period of six (6) months immediately following the termination of Employee’s employment with the Company for any reason, whether such termination is at the initiative of the Company or Employee and regardless of the reason for the termination, Employee will not, for Employee or any third party, directly or indirectly (i) divert or attempt to divert from Company (or any affiliate of it that might be formed) any business of any kind in which Company (or any affiliate of it that might be formed) is engaged, including, without limitation, the solicitation of or interference with any of the Company’s customers to the extent such activities are intended to or may reasonably result in harming the Company’s relationship with any of its customers, or (ii) encourage or solicit any employee or consultant of the Company (or any of its affiliates) to end or otherwise modify such employee’s or consultant’s relationship with the Company for any reason.

(b) Understandings. Employee acknowledges and agrees that (i) the Company informed Employee as part of the offer of employment that the restrictive covenants set forth above would be required as part of the terms and conditions of such employment; (ii) Employee has carefully considered the restrictions contained in this Agreement and determined that they are reasonable, and has sought the advice of legal counsel if so inclined; (iii) the restrictions in this Agreement will not unduly restrict Employee in securing other suitable employment in the event of termination from the Company for any reason, whether at the initiative of the Company or Employee; and (iv) Employee signed this Agreement before commencement of, and as a condition to, Employee’s employment with the Company.

Asked on 1/27/13, 4:03 am

1 Answer from Attorneys

John Kirby Law Offices of John M. Kirby

Those types of covenants are generally enforceable, as long as they are reasonable. This particular agreement does not appear unreasonable, based on existing North Carolina case law. The agreement would prohibit the employee from taking (or "diverting") the current customers of the current employer, but it does not seem to prohibit the employee from working for a competitor. Therefore the employee could work for a competitor, but could not take (i.e. do business with) the current employer's existing customers. These agreements can be difficult to interpret, and other factors such as the nature of the industry can have an impact on this. For that reason, you might be well-served to consult with an attorney in your area to provide him or her with more facts about this issue, to receive a more comprehensive answer.

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Answered on 1/27/13, 6:46 am

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