North Carolina Non-Compete Business Litigation Attorney
In North Carolina, it is common for employers to seek to protect their business by having employees sign non-compete agreements. Non-compete agreements generally limit, for a particular time and area, the ability for an employee to leave the company to work in the same industry. It appears that North Carolina courts are increasingly limiting the enforceability of these agreements against employees who do not possess access to trade secrets or unique information. As a result, it will be important for employers to carefully limit the scope of their non-compete agreements in order for them to be enforceable. Similarly, employers seeking to hire employees who have non-competes from their current employer may be more willing to consider hiring them. If you are an employer or employee with issues regarding a non-compete agreement, contact the Raleigh business litigation firm of Maginnis Law, PLLC. Maginnis Law’s civil litigation attorneys handle business contract disputes in Raleigh, Cary, Apex, and throughout Wake County, Durham County, Johnston County and the surrounding areas of the Triangle. Contact the firm at 919.526.0450 or visit our contact page here.
The North Carolina Court of Appeals recently addressed a Franklin County business litigation case, Phelps Staffing v. CT Phelps, Inc. The plaintiff, a staffing agency for blue collar workers, asked its employees to sign a non-compete in order to keep the defendant, a separate staffing company, from “poaching” its contract employees by asking them to work at the same job-site but to switch temp agencies so the new agency would get the commission for the worker. The Court of Appeals ruled that the non-compete clause in question “offended public policy” and was unenforceable, leading to a dismissal of claims against the competitor who hired the workers with full knowledge of the employee’s non-compete provisions.
The plaintiff company argued that the non-compete protected a sufficient business interest of the employer, in that it kept employees from jumping to another staffing agency for working on the same job that the plaintiff had spent time, energy, and money locating. However, the Court ruled that the non-compete went too far and that it harmed the individual in an amount greater than was required for the protection of the company. Overbroad non-compete agreements are particularly dangerous as North Carolina courts will not rewrite non-compete clauses for a business, if the clause is unenforceable, then there is no non-compete protection (as opposed to the Court giving a more limited protection that would be lawful).
North Carolina courts not only look at the geographic and time limitations, but will look at the type of work performed by the employee and what access to trade secrets or other proprietary information they might have. It has become increasingly necessary for employers to use distinct non-compete language for individual employees as well as for employees and potential employers to review these clauses to determine if it should impact their personnel hiring decisions.
If you are an employer or an employee with a non-compete business dispute or potential dispute, contact the business litigation firm of Maginnis Law, PLLC at 919.526.0450 or submit a new case inquiry here. The firm’s civil attorneys represent both employers and employees and offer free initial consultations for business inquiries.