North Carolina`s only legal provision dealing directly with non-competition requires that any contract that restricts a person`s right to do business anywhere in the state be in writing and signed.1 However, this law does not directly address when such agreements constitute an authorized restriction on trade. Like most other states, North Carolina courts were only willing to enforce such agreements if they were “appropriate in time and territory.” 2 The adequacy analysis shall include a detailed examination of the worker`s employment position and of the skills and knowledge acquired, in order to ensure that the limitation is not broader than is necessary to protect the employer`s undertaking3. What happens when the employment contract expires while the worker continues to work under the same conditions for a certain period of time? Is the non-competition clause still in the process of expiring of the written contract, so that the restrictive agreement begins to run with the dismissal of the worker, unlike the termination of the written contract? There is a law in North Carolina that states that if, upon expiration of the written agreement, the worker continues to work under the same conditions for the employer, a truly implied contract is established, subjecting the workers to the same obligations and restrictions as those provided for in the original written employment contract. It is not certain that this doctrine can be extended to the rules of non-competition. However, this is an argument that employees must respect in assessing their rights. The lesson for employees is equally clear: if you plan to work for a competitor, check your employment contract or any other one you have signed very carefully. If you have signed a non-competition contract and/or a contract prohibiting debauchery, this agreement will be applied if it is drafted correctly. The duty of consideration means that your employee must receive something valuable from you in exchange for the restriction after the employment relationship. In other words, in exchange for the employee`s promise not to work in certain sectors or for certain companies for a certain period of time, you have to give something valuable to the employee. The consideration must not be a cash payment and may take the form of an additional promotion or benefit or the initial hiring of the employee.
The courts have consistently ruled that when the non-competition clause is signed at the beginning of employment, the new body is given due consideration. If your employer believes you are violating the non-compete clause, they can sue you and not only try to get damages of money, but also try to get an injunction. In the event of an injunction, the court will order you to end the breach of the agreement, at least while the trial progresses. In some cases, the employer will attempt an injunction (also known as an “TRO”) to immediately prevent you from violating the non-full agreement. The Court of Appeal found that the vague reference to all of Andy-Oxy`s customers within the restricted area, without restricting the scope of customers with whom Harris had physical contact, was too broad and did not protect a legitimate business interest, making it unenforceable. In particular, North Carolina courts will refuse to impose non-compete rules contrary to the public interest of the state (United Labs., Inc. v. Kuykendall, 370 p.E.2d 375, 380 (N.C 1988)). According to the latest issue of Seyfarth`s 50 State Desktop Reference: What Businesses Need to Know about Non-Competes and Trade Secrets Law allows 28 states to impose competition bans against laid-off employees (including North Carolina and South Carolina), three would likely do so, nine would not, and the problem remains unsolved in 10 states.