Non-compete obligations are also common in the field of information technology (IT), where employees are often burdened with proprietary information that can be considered valuable to a company. Other places where these agreements can be found are the financial industry, the corporate world and manufacturing. The extent to which non-compete obligations are permitted by law varies by jurisdiction. For example, in the United States, the State of California invalidates non-compete clauses for all interest groups except shareholders when selling shares. [3] If the employer requests the termination of the non-compete obligation during the non-compete period, the People`s Court supports this application. If, at the end of the non-competition obligation, the employee asks the employer to pay an additional compensation of 3 months for the non-competition obligation, the People`s Court supports this claim. Non-compete obligations cannot be enforced in North Dakota and Oklahoma. California does not recognize any non-compete obligation, and an employer that binds an employee to one after termination of employment can be sued. Hawaii banned non-compete obligations for high-tech companies in 2015. In 2016, Utah changed the legislation and limited the new non-compete rules to just one year. Most States apply a kind of standard according to which a non-compete obligation must not be scandalous in terms of duration or geographical scope and must not significantly restrict a worker`s ability to find employment. However, the courts differ considerably in the interpretation of the conditions of a non-compete obligation which would be excessively onerous.

If the average monthly wage of 30% of the twelve months preceding the termination or expiry of the employment contract, as mentioned in the previous clause, is lower than the minimum wage of the region where the employment contract is performed, the employer pays according to the minimum wage. In 2018, non-compete clauses applied to 18 percent of workers in the U.S., compared to 38 percent of employees. [When?] Although more common among workers with higher wages, non-competition covered 14% of workers without a university degree in 2018. [24] In March 2019, the U.S. Federal Trade Commission was under pressure from politicians, unions, and interest groups to ban non-compete obligations. A related petition estimated that «one in five Americans (2) If a proposed acquisition consists of providing or using services in the territory of another state, and the terms of a contract or agreement specify or limit the sources to be requested. Non-compete obligations must be of a reasonable duration and scope. The appropriateness of the duration of the contract depends on the specific facts of the case. For example, if the non-compete obligation is intended to protect confidential information, the duration should not be longer than the period for which the information has value.

The geographical area covered by the agreement must also be appropriate, taking into account the circumstances. This strongly depends on the services provided by the employee and the importance of the services to the employer`s business. In general, the courts do not allow a non-compete obligation to prevent an employee from working in a geographical area where the employer is not active. In Virginia, courts assess (1) the function, (2) geographic scope, and (3) duration of the ACSB against the employer`s legitimate business interests to determine its relevance. [62] In addition, NQCs are only reasonable if they prevent the employee from competing directly with the employer and cannot include any activity in which the employer is not involved. [63] Virginia courts will generally not seek to revise or enforce a narrower restriction in a non-compete obligation[…].