The new requirement amends the existing common law requirement that a contract provides a reasonable period of time to apply it. The adequacy of the federal state`s lifespan was determined on the basis of evidence as to why the specific period was necessary. Courts in some states go “blue pencil” or change the duration of a competition to make it reasonable in light of the evidence. It is not clear whether utah courts would give “blue” an alliance not to compete. In general, non-competitive agreements require the worker to pay the employer`s legal fees resulting from a legal action to impose a non-competition clause if the employer wins the action by demonstrating in court that the worker has breached a non-competition obligation in force. This legal damages (or the employer`s costs for paying a lawyer) are much easier to prove than the loss of earnings or loss of value. On the other hand, if the employee proves that he did not violate the provisions of the non-competition clause or that the non-competition clause is unenforceable, the employee may normally compel the employer to pay his legal fees in connection with the legal action. The post-Employ-Restrictions Act explicitly states that an employer is liable for legal fees when the non-competition clause is considered unenforceable. In the past, the general rule in the United States has allowed for non-competitive agreements if appropriate in time and space. California was the number one exception. Section 16600 of the Industry and Occupations Code invalidates most non-competitive agreements and promotes worker mobility from employer control: “The interests of the worker in his own mobility and improvement are considered to be priorities for the competitive business interests of employers, for which neither the worker nor his new employer has committed an illegal action that accompanies the change in the workplace.” Diodes, Franzen Inc., 260 Cal.
About 2d 244, 255 (Cal. Ct. 1968). In California, employers may be held liable for offences under Section 16600, even if they do not seek to impose a non-competition clause, as the mere existence of the agreement could impair the worker`s ability to exercise freedom of mobility. In deciding whether to apply a non-competition clause, the courts re-examine whether it is intended to protect legitimate business interests. If its main objective is to prevent competition, it is likely not to apply. This seems to be a stupid consideration, because a competition agreement that is not in competition by definition prevents competition. It is the main objective of the agreement that counts. It must focus on protecting the company and not preventing competition. If, for example.B. the purpose of the agreement is to protect the company`s business secrets, overvalue or investment of time and money in the employee, it is more likely that the employee will not compete.
On the other hand, if the agreement is intended to prohibit an employee from expanding his skills and talents outside the company, this cannot be applicable. It is clear that the distinction between the protection of legitimate business interests and inappropriate attempts to prevent competition is not always clear. Perhaps the best question is whether the non-competition clause is fair to the employer or whether it suppresses the worker`s growth.