Editor's Note
Great Reference on State Noncompete Laws
Here's Seyfarth's updated reference that summarizes noncompete and trade secret laws of all 50 states. I love and use these references and appreciate the time and work that goes into creating them.
Noncompete agreements prevent employees from working for a competitor for a certain period of time. In California, they are unenforceable. In other places, they can be enforced for a reasonable time and under reasonable other restrictions like geography. But state law varies widely and wildly.
Employers often justify using noncompete agreements because they want to protect their trade secrets when employees go work somewhere else, particularly for a competitor. But trade secret agreements are often more effective.
Trade secrets can be protected in all 50 states and under Federal Law. But there's no protection for things that aren't really valuable and aren't secret. Trade secrets have to be more than the general desire not to let the other guys to know what you're doing.
Also, many trade secrets have a pretty short shelf life. The way you are doing something today is probably not the way you will be doing it in a year or two, especially in tech. But it really depends on the business, the work, and whether there is something of value at stake.
So be aware of the laws in the states where you have employees and get your friendly employment lawyer's help in figuring out whether it makes sense to have noncompete or trade secrets agreements with employees.
- Heather Bussing
