Non-compete agreements have become increasingly common in recent years, especially in the tech industry. These agreements are contracts between an employer and employee that typically prohibit the employee from working for competitors or starting a competing business for a certain period of time after leaving the employer. While non-compete agreements are often seen as a way for employers to protect their intellectual property and trade secrets, they can also restrict employees’ ability to find new work and pursue their chosen field.

In some cases, non-compete agreements have been deemed invalid by courts. This article will explore some of the key case law on non-compete agreements.

One of the most significant cases in recent years is the 2018 decision by the California Supreme Court in the case of Edwards v. Arthur Andersen LLP. In this case, the court ruled that non-compete agreements are generally unenforceable in California, except in very limited circumstances. The court held that such agreements are a restraint on trade and can limit an individual’s ability to pursue a chosen profession. The court did note, however, that certain narrowly-tailored non-compete agreements may be permissible in certain circumstances, such as when an employer is protecting its trade secrets.

Another notable case is the 2019 decision by the Washington State Supreme Court in the case of Franchise Tax Board v. Hyatt. In this case, the court ruled that the state was not required to honor a Nevada court’s ruling enforcing a non-compete agreement between a former employer and employee. The court held that the non-compete agreement violated public policy, as it significantly restricted the employee’s ability to pursue his profession, and also noted that the policy considerations of the two states were different.

In 2017, the Illinois Appellate Court issued a decision in the case of Reliable Fire Equipment Company v. Arredondo that provides guidance on how courts will interpret and enforce non-compete agreements. In this case, the court ruled that a non-compete agreement must be reasonable in terms of scope, geography, and duration. The court held that a non-compete agreement that was too broad in terms of geographic scope and duration was unenforceable, as it prevented the employee from pursuing his chosen profession in any part of the country.

Overall, the case law on non-compete agreements is complex and varies depending on the state and industry in question. While non-compete agreements can be a valuable tool for employers to protect their interests, they must be carefully crafted and tailored to meet the specific needs of the company. Employees who are subject to non-compete agreements should also be aware of their rights and consult with legal counsel to ensure that their interests are protected.