Advertisement

April 23, 2014

State Lines May Not Be When It Comes to Noncompetes

Hans Murphy’s post here last week on the recent Texas noncompete decision is just the latest reminder that state laws vary dramatically when it comes to the enforcement of noncompete agreements.  Employers often think that if they specify in their noncompete agreements that the law of their home state will be applied, then they will avoid the difficulties encountered in enforcing agreements in Texas and other less enforcement-friendly states. In fact, courts will often disregard choice of law clauses if their effect would be to negate the public policy of the state in which the case is being litigated. In other words, if a former employee beats you to the courthouse in a state more friendly to the employee, your choice of law language might be worthless.

Choice of forum clauses are somewhat more powerful than choice of law clauses. A choice of forum clauses dictates that an agreement must be litigated in a particular state, and these clauses generally receive more deference from courts. The deference is not absolute, however.

In short, if your employees can compete with you from another state – and it is increasingly uncommon that they cannot – you must be aware of the laws of those states and factor those in to your noncompete program. Here is an article that I wrote recently for Ohio lawyers exploring this topic in more details (note: the article begins on page 4 of the attached publication).

© 2014 BARNES & THORNBURG LLP

About the Author

William A. Nolan, Barnes Thornburg Law firm, Labor Law Attorney
Managing Partner of the Columbus Office

William A. Nolan serves as the Managing Partner of Barnes & Thornburg LLP’s Columbus, Ohio, office, which he opened in 2009. He is a member of the firm’s Labor and Employment Law Department. Bill has extensive experience as a litigator, trial lawyer and counselor. His practice includes a broad range of issues that organizations face in our rapidly changing competitive, legal and workplace environments. In short, he works to help management structure organizations, practices and relationships to proactively minimize the business disruption of disputes, and to help clients...

614-628-1401

Boost: AJAX core statistics

Legal Disclaimer

You are responsible for reading, understanding and agreeing to the National Law Review's (NLR’s) and the National Law Forum LLC's  Terms of Use and Privacy Policy before using the National Law Review website. The National Law Review is a free to use, no-log in database of legal and business articles. The content and links on www.NatLawReview.com are intended for general information purposes only. Any legal analysis, legislative updates or other content and links should not be construed as legal or professional advice or a substitute for such advice. No attorney-client or confidential relationship is formed by the transmission of information between you and the National Law Review website or any of the law firms, attorneys or other professionals or organizations who include content on the National Law Review website. If you require legal or professional advice, kindly contact an attorney or other suitable professional advisor.  

Some states have laws and ethical rules regarding solicitation and advertisement practices by attorneys and/or other professionals. The National Law Review is not a law firm nor is www.NatLawReview.com  intended to be  a referral service