A North Carolina non-compete agreement is a legal document signed between employers and employees. A non-compete agreement is designed to protect the employer by placing restrictions on information that an employee can share.
A non-compete agreement can also be used to limit where an employee can work during or after leaving his or her current position.
While a North Carolina non-compete agreement is a useful legal tool, it is not always enforceable. States differ regarding rules for non-compete agreements, and some are stricter than others.
Reasonable Uses and Objections
- Enforceable when terminated without cause? – Yes.
- Employee non-solicitation agreement permitted? – Yes.
- Customer non-solicitation agreements permitted? – Yes.
- Does continuing employment equal sufficient consideration? – No.
Legally Enforceable in North Carolina?
Yes, a non-compete agreement is legally enforceable in North Carolina as long as it has appropriate limitations in terms of time and scope. If a non-compete agreement is unduly harsh in restricting where an employee can work during or after leaving his or her current position, then it might not be legally enforceable.
In general, any information that is considered vital to the employer’s business interests can be protected by a North Carolina non-compete agreement. For example, North Carolina non-compete agreements can be used to protect confidential business information, trade secrets, and goodwill.
A non-compete agreement in North Carolina may also be required to clearly specify what information is considered confidential or a trade secret.
Reasonable Use and Exemptions
There are limitations that could be placed on a North Carolina non-compete agreement. First, every non-compete agreement in North Carolina has to be specified in writing. The non-compete agreement also has to be considered a part of the employment contract, which the employee should be given an opportunity to read and review before being asked to sign.
For a non-compete agreement to be considered enforceable, it needs to protect legitimate business interests. This means that it must also be reasonable in terms of time and space. A non-compete agreement cannot go against public policy in North Carolina.
Furthermore, not every employee can be subjected to a non-compete agreement. In North Carolina, non-compete agreements involving physicians are not considered legally enforceable.
Limitations on Time
In the event of a breach of a North Carolina non-compete agreement, you have three years to file a lawsuit.
North Carolina law does not clearly specify geographic limitations for non-compete agreements; however, remember that the law states that the non-compete agreement has to be considered reasonable and time and space. Therefore, the geographic limitations cannot be overly harsh.
Download our North Carolina non-compete agreement template, available in Word and PDF format: