Many businesses and business owners in Rhode Island use a non-compete agreement to protect confidential information. A Rhode Island non-compete agreement can prevent current and former employees from taking information from one company and sharing it with a competitor. In addition, a non-compete agreement in Rhode Island can be used to prevent current and former employees from working in certain locations during and after their time with the company. There are certain regulations that must be met for a non-compete agreement in Rhode Island to be enforceable.
Is a Non-Compete Legally Enforceable in Rhode Island?
Yes, Rhode Island non-compete agreements are legally enforceable. They can be used to prevent employees from sharing information from one business with the competitors of that business; however, there are certain limitations and restrictions that Rhode Island non-compete agreements must abide by. Otherwise, they might not be legally allowed. [1]
What’s Protected?
Different categories of information can be shielded by a Rhode Island non-compete agreement. For example, confidential information and trade secrets can be protected using a non-compete agreement. Lists of customers can also be shielded by a non-compete agreement, meaning they cannot be shared. Training related to special or unique services can also be protected by a non-compete agreement in RI.
Reasonable Use and Exemptions
A non-compete agreement in Rhode Island has to meet all reasonable use expectations for it to be legally enforceable. The non-compete agreement must be narrowly tailored, and the employer must be able to prove that the agreement protects a legitimate business interest. The non-compete agreement also has to be limited in terms of time, geography, and activity. Otherwise, it could place an overly harsh burden on the employee. Furthermore, a non-compete agreement cannot harm the public interest.
There are several examples of individuals who cannot be subjected to a non-compete agreement. This includes physicians, employees who are under the age of 18, student interns, short-term employees, and FLSA nonexempt employees. In addition, low-wage employees who are not learning any more than 2.5 times the federal poverty level, based on their regular hours, cannot be subjected to the terms of a non-compete agreement.
- 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
Non-Compete Agreement Rhode Island Limitations
There are a few limitations that could be encountered when structuring a non-compete agreement in Rhode Island. Some of these limitations include:
Limitations on time
There is no specific duration limit for a non-compete agreement, but it must be reasonable. The duration of the non-compete must make sense given the nature of the business and cannot be excessive or unreasonably long. The statute of limitations in Rhode Island to file a lawsuit following a breach of a non-compete is 10 years.
Non-compete agreement Rhode Island geographical limitations
A non-compete agreement in Rhode Island cannot place an overly harsh burden on an employee. If a judge decides that the agreement is too broad, it could be thrown out. The employer must be able to justify why a non-compete agreement has the geographic limitations that it does.
Rhode Island Non-Compete Agreement Sample
Take a closer look at our Rhode Island non-compete agreement template, which is available for download in Word and PDF:
Non-Compete Agreement
