Restrictive covenants in employment agreements and employee benefit arrangements will be enforced in appropriate circumstances, but parties should be aware of varying standards from state to state, warns Jonathan Orleans for Pullman & Comley.

Orleans, writing in a post for JDSupra, says that enforcement of noncompetes can be complicated. Sometimes statutes create exceptions, and sometimes exceptions are developed through caselaw.

While courts frequently comment that restrictive covenants are “disfavored in the law,” they can be enforced if they meet certain standards.

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A non-competition agreement raises state-law public policy concerns. As a result, states often restrict the scope of non-competition agreements before they will enforce them, warns Mark Koogler in Porter Wright Morris & Arthur’s Federal Securities Law Source.

“Most jurisdictions disfavor non-competition agreements as a matter of public policy because they view such agreements as a restraint of trade,” writes Koogler. “Broader language places a heavier burden on the employer to justify the restrictions whereas narrowly tailoring the language of a non-competition agreement reduces the risk that a court will construe the agreement to unnecessarily restrain trade.”

Koogler writes about the importance of balancing the interests of the employer and employee.

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It generally is a defense to a breach of contract claim if the defendant proves that the plaintiff was the first one to materially breach the parties’ agreement, writes Shep Davidson for The In-House Advisor.

He discusses a recent Massachusetts Superior Court case illustrating how a plaintiff seeking to enforce a post-employment restrictive covenant can avoid falling victim to such a defense – if the company has a carefully crafted agreement is in place.

In his article, he outlines the lessons for in-house counsel, advising how a well-drafted contract can eliminate a potential defense that could thwart an otherwise well-conceived restrictive covenant.

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Practical Law and Epstein Becker Green attorneys will present a free, 75-minute webinar providing insights into recent developments and expected trends in the evolving legal landscape of trade secrets and non-competition agreements on Wednesday, Nov. 30, 2016, at 1 p.m. EST. This webinar will focus on how to navigate this developing area and effectively protect client relationships and proprietary information.

Epstein Becker lawyers Peter A. Steinmeyer, Robert D. Goldstein and Anthony J. Laura will be presenters.m The moderator will be Barbara J. Harris, Senior Legal Editor, Practical Law Labor & Employment.

Topics will include:

• The Defend Trade Secrets (DTSA), including the new federal remedies available to employers and the steps they need to take to fully benefit from them.
• Newly passed state statutes addressing restrictive covenants, including who can enter into them, industry restrictions, and temporal restrictions.
• Recent decisions regarding what constitutes adequate consideration for a non-compete.
• Interesting developments determining choice of law issues, including a new California statute restricting choice of law provisions.
• Administrative agency developments, including agency enforcement actions cracking down on non-competes.

A short Q&A session will follow.

Register for the webinar.

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Barbara E. Hoey and Dustin E. Stark of Kelley Drye’s Labor and Employment group have a warning for New York employers – your non-compete agreements may be under attack.

In an article published on the firm’s Labor Day blog, the authors wrote that the office of the state’s attorney general recently reached settlements with two companies that require each to stop requiring incoming employees to sign non-compete agreements.

“The settlements clearly send a signal that the New York AG is critical of employers who require low-level employees to sign non-competes as a condition of employment. These agreements were never favored by New York courts, and this may be the time to re-think the broad use of such contracts,” according to the report.

“The take-away here is that if your company requires that all (or a large number of) employees sign non-compete agreements, you should re-examine this process. For one, a non-compete signed by a ‘low-level’ employee may not be enforceable anyway. Second, you do not want to wind up to be the next subject of an AG investigation,” they write.

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Noncompete agreements are becoming boilerplate in employment contracts, and for employees, there’s nothing good about them, writes Patrick Thibodeau in ComputerWorld. He writes that these agreements create enormous uncertainty about future job options and worry about launching a new business, and their use is spurring legislative fights in leading tech-industry states.

He refers to one recent survey, with more than 11,500 respondents, that was conducted by three law professors. That survey found that about one in five workers have signed noncompete agreements.The report also looks at legislation in several states that could address the use of the agreements.

Read the article.