Restrictive Employment Covenants — Enforceability

A restrictive covenant enables an employer to prevent an employee from working with an employer's competitor or from establishing a business that will compete with the employer.

Courts apply the following standards to determine whether or not the employer's restrictive employment covenants are enforceable. The first standard is the length of time that the employer has stated in the agreement. The length of time must be reasonable under the circumstances and in the event that the length of time is unreasonable the court will not enforce the restrictive employment covenant. The second consideration by the courts is whether or not the geographical area is reasonable. If it is not, the restrictive covenant will not be enforced against the employee.

Employers who believe that their restrictive covenant will be enforced against the employee, will often file suit against the employee. The employer will see a court order to prevent the employee from competing with the employer. This relief by the courts is characterized as injunctive relief. Most often an employer when seeking this relief must obtain a security bond which in the fact protects the employee. In the event the employer is unsuccessful in obtaining a court order, especially because the restrictive covenant is unenforceable, then in such an event the employee may be eligible for damages. Period of time of which the employee may be eligible for damages is the time from the beginning date the court order was obtained until the time the employer was unsuccessful in obtaining a final court order.

Other relief that employers seek when suit is filed, will involve asserting that the employee has taken quotation marks trade secrets.

Fredric G. Antenberg, is a business lawyer familiar with restrictive covenants both from the employers needs as well as from the employee perspective. Fredric G. Antenberg practices business law in Howard County and surrounding Maryland counties and his offices are located in Columbia Maryland. Contact Fred by calling 410 730-4404 or have a look around on our website. Howard County Business Law Lawyer.