The Fairfield County employment lawyers here at Maya Murphy, P.C., have advised numerous residents of Greenwich, New Canaan, Stamford, Darien, and Westport about the enforceability of non-competition provisions contained in Employment Agreements or Separation Agreements. While every case, and the wording of every agreement, is different, there are five “constants” that Connecticut courts look to in deciding whether or not to enforce a non-competition clause. They are the starting point for any discussion or individual analysis of whether a particular non-compete may be enforceable as to you. Again, every case turns upon its own peculiar facts.
The key concepts are:
The reasonableness of the time restriction.
As a general proposition, a time restriction of up to three years is generally found to be reasonable. That can vary, however, depending upon the industry involved. In the world of information technology, for example, a particular product’s “shelf life” may be measured in months, rather than years, and an IT employer may not need to put a former employee on the sidelines for a longer period of time (see #’s 3 and 4 below).
The reasonableness of the geographical restriction.
An employer is entitled to no more non-competition protection than it requires. Stated differently, a company in Connecticut doing business only east of the Mississippi river should not be able to preclude a former employee from joining a competing company anywhere in the United States. The broader the geographical restriction the greater the judicial scrutiny.
The degree of protection afforded to the employer.
An employer is generally entitled to protect its existing business and client or customer base, together with current and realistic plans for expansion. A hedge fund typically will not be able to prevent a former employee from working outside of the financial industry, and a start-up will not garner protection for grandiose or “pipe-dream” plans to capture an entire industry.
Does it unnecessarily restrict an employee’s ability to pursue his or her career?
While non-competes are enforceable in Connecticut, Judges are reluctant to order an individual not to pursue his or her chosen profession or livelihood. In a severely depressed job market, the mere existence of a prior non-compete provision can sound the death knell of a job search and this enforceability aspect requires careful analysis by an experienced employment attorney. We at Maya Murphy can “compare and contrast” the language of a particular non-compete with the countless others we have seen before to advise you as to its likely enforceability, or whether an employer can be convinced to scale back its reach.
The degree to which it interferes with the interests of the public.
Here, an extreme example best illustrates the point. We represented a pediatric cardiac surgeon in seeking to avoid a non-compete. Obviously, such skilled physicians are rare and society benefits greatly from the availability of their services. The public is best served by minimizing restrictions on their employment and maximizing the availability of their life-saving skill.
These five “constants” are viewed separately; a non-compete provision can (but need not) be rendered unenforceable if it violates even a single factor. The non-compete is viewed and evaluated in its entirety and courts may ascribe greater or lesser weight to a particular factor, but all enter into the final equation regarding enforceability.
The employment attorneys in Maya Murphy’s Westport, Connecticut office stand ready to assist you in determining whether, or to what extent, you may be subject to a non-compete contained in an Employment Agreement or Separation Agreement. No two cases are the same; there are always differentiating facts and circumstances. Thus, you should consult with an experienced practitioner to determine where you stand. For further information, call Maya Murphy at (203) 221-3100.