A New Mexico Non-Compete Agreement is a legal document that businesses can utilize to protect their confidential information and intellectual property.
This agreement is designed to hold employees accountable for not sharing trade secrets with competitors. Understanding the enforceability of non-compete agreements in New Mexico is essential, as they can have significant implications for employers and employees.
Reasonable Uses and Objections
- Enforceable when terminated without cause? – Not decided.
- Employee non-solicitation agreement permitted? – Yes.
- Customer non-solicitation agreements permitted? – Yes.
- Does continuing employment equal sufficient consideration?– Yes.
Legally Enforceable in New Mexico?
Yes, employers can enforce non-compete agreements in New Mexico. However, it’s up to the court system to determine whether a specific agreement is reasonable.
For example, non-compete agreements set up to completely restrict a former employee’s ability to be gainfully employed in their trade aren’t likely to pass the reasonability test. Therefore, employers must word these contracts carefully to avoid overreaching and making them null and void.
Here are a few considerations you should keep in mind as per SB0325:
- Employee has to receive some consideration in return for agreeing to a non-compete.
- New Mexico’s non-compete agreement geographical limitations aren’t set in stone. However, they must be reasonable. Additionally, you can only impose reasonable time restraints during which an employee cannot compete with your business.
- Certain healthcare providers cannot bind employees under New Mexico law.
Non-compete agreements hold up in New Mexico if they are reasonable in time, scope, and geographical distance.
What’s Protected?
A New Mexico non-compete agreement places limitations on where and for whom employees can work during employment and following termination from their employer. They exist to protect businesses’ legitimate rights. However, there are limits to the geographical and time constraints imposed.
In New Mexico, non-compete agreements hold the following protections for your company:
- Maintaining workforce
- Limitation of competition
- Customer relationships
Reasonable Use and Exemptions
In New Mexico, the reasonable test for non-compete contracts considers the legitimate interests of the employer, employee, and public.
Exemptions to this law include healthcare practitioners such as physicians, certified registered nurses, dentists, osteopathic physicians, podiatrists, and anesthesiologists.
Limitations on Time
The time limit, while not fixed by state law, is contingent on a standard of reasonability.
Geographical Limitations
The New Mexico non-compete laws do not specify the specific geographic region or time limits for these contracts. However, it’s essential to consider what would be reasonable given the circumstances and if it is narrowly tailored enough only to protect legitimate business interests.
Sample
Below, you can download a non-compete agreement New Mexico template in PDF or Word format:
