Non compete clauses (more properly called restrictive covenants) are equitable remedies (sometimes called extraordinary remedies).In Connecticut they are enforceable but difficult and expensive to enforce. There was a case here several years ago involving a local television personality that enforced a restrictive covenant to a limited degree. In states in which they are enforceable they are usually narrowly construed by the courts to effectuate their remedial purpose. This is because you are attempting to limit someone in their ability to earn a living.
The court will examine the restrictive covenant to make certain that it is reasonable in terms of the 1. scope of the activity you want to restrict, 2. the time period for which you wish to restrict the activity and 3. the size of the geographical area in which you want to restrict the activity (your marketing area).
If any one of the three is deemed to be unreasonable by the court, the covenant will not be enforced or in the alternative the court may enforce it to a lesser degree (smaller area, shorter time or more limited activity). It will not fully enforce the covenant to the extent that it seeks to limit the activity in areas beyond the plaintiff's marketing area, to the extent that the duration of the restriction is too long or to the extent that the activity to be restricted is broader than the type of business in which you are engaged.
I read a case a while ago in which an orthodontist had hired a young dentist to work for him subject to a restrictive covenant. After several years the dentist resigned, and opened his own practice (Not including orthodonture work) in the same area as the orthodontist. When the orthodontist sued to enforce restrictive covenant, the court ruled that the covenant was reasonable to the extent of the five county geographical which was the orthodontist's marketing area. It further held that the five year duration of the restrictive covenant was reasonable, but held that the scope of the activity sought to be restricted (all dentistry) was overly broad and unreasonable. The court elected to fashion a more limited remedy. It enforced the covenant to the extent that there was competition in the area of orthodonture only, but left the dentist free to practice other forms of dentistry.
When you initiate a suit to enforce a restrictive covenant, the plaintiff is seeking injunctive relief from the court. An injunction is a court order enforcing the restrictive covenant. The plaintiff usually seeks three court orders in the course of the suit. He normally seeks a short restraining order of several weeks duration which temporarily enforces the restrictive covenant until a court hearing can be scheduled to have a temporary injunction issued. The temporary injunction , if granted by the court, enforces the covenant for the duration of the case. That could be several years before it comes to trial depending on the court's backlogue of cases. Therefore, in some states it is customary for the court to require the plaintiff to post a bond to compensate the defendant for his lost wages during the period of the temporary injunction in the event that that plaintiff loses his case. If the plaintiff is successful, the court will issue a permanent injunction enforcing the restrictive covenant.
If your state has a trade secrets statute, you may want to have your attorney redraft your employment contracts to define sensitive information (i.e. identities of clients, your pricing structure, etc.) as a trade secret. You could then seek enforcement of the remedies provided by the statute. This provision could be contained in your employment contracts in addition to the restrictive covenants. It would be an additional remedy, and depending upon the state in which you reside it may be easier to enforce than the restrictive covenant.
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