A Delaware Non-Compete Agreement is a contract designed to protect an individual’s business interests and assets, information, and interactions. This legal document prevents employees from disclosing proprietary information or details essential to a business operation.
The agreement protects employers and business owners by preventing the disclosure of sensitive business information that could be used by competitors.
Reasonable Uses and Objections
- Is the agreement enforceable after termination without a specific reason? – Yes.
- Is an employee non-solicitation agreement allowed? – Yes.
- Are any customer non-solicitation agreements permitted? – Yes.
- Does current and continuing employment constitute consideration? – Yes.
Legally Enforceable in Delaware?
Yes, a Delaware non-compete agreement is enforceable and will be upheld in court. This agreement is usually a condition of employment but may be used for other business interests, such as private or independent contracts with freelance providers or service providers. Keep reading to determine when this agreement is appropriate and what conversations and exemptions are in place.
Reasonable Uses and Exemptions
A Delaware non-compete agreement is governed by a reasonable time frame and overall geographic reach, with a few exceptions. The business owner can protect their interests with exceptions related to the location and geographic spread of covered information.
If one were to enforce such an agreement, a convincing case must be made for the length of time and consideration for the extent of the information’s reach. Some considerations would include the following.
- The nature of the agreement and the business’s interests regarding that contract.
- How far is the geographic reach?
- Restrictions with regard to particular groups or customers.
- Does it protect legitimate interests?
- Is the duration of the agreement reasonable to protect a legitimate business interest?
There is a statute of limitations of three years for breach of contract lawsuits. These contracts exclude physicians in the state because physicians are exempt. The non-compete’s enforceability is determined based on reasonable time and geographic reach. It’s also designed to protect legitimate economic interests and survive the equity balance.
The limitations of a Delaware non-compete agreement are related to the scope of business and competitors in that market.
Download the free Delaware Non-Compete Agreement template in PDF and Word format below.