Iowa Noncompete Agreement: What's Included and Enforceability

The one thing to make sure with noncompete agreements is that it is reasonable in terms of duration and the area you cannot compete in. Courts use a reasonableness test to determine whether a noncompete agreement is valid. If provisions are deemed to be unreasonable and fail the test, they could be altered or struck out of the agreement.

In order to ascertain the limitations and implications, you would need to review the specific language of the agreement. If the non-compete is very broad, it's possible it would not be enforceable. In New York, for a non-compete agreement to be enforceable, it must be for a reasonable period of time and limited geographic scope. It also must protect the employer's legitimate interest. For example, the restrictions must protect confidential information or specialized skills you gained while on the job, or some other legitimate interest. If the agreement goes beyond those limitations, a court could find the non-complete to be unreasonable and unenforceable, in whole or in part. As to what restrictions your specific non-compete imposes (and the reasonableness of those restrictions), you would need to look at the specific language in the agreement. If you are unsure about the limitations, you should seek advice of counsel to help decipher the extent it would apply to your industry in general, and the likelihood it would be enforceable in court.

Some things that would be relevant to know are: what industry are you in? What specific competition are you worried about? Are you going to include non-disclosure provisions, no-solicitation provisions or non-circumvention provisions? What risks are you specifically worried about?

Congratulations on your new job. Generally, a choice of law clause contained in a non-compete agreement indicates which state law will govern the contract. By way of general example, let's pretend we have a non-compete agreement that states the choice of law is Florida. Let's also pretend the parties to this agreement had a dispute and one party filed a lawsuit against the other in the state of New York. In this pretend scenario, because the parties agreed Florida to be their choice of law for the non-compete agreement, the court in New York would abide by that contractual agreement and apply Florida law. While choice of law clauses are commonly used to indicate what law will apply to a contract, the language used or omitted plays a significant role in their interpretation and enforceability.

If the future company buys the equity of your current employer, the Non-Compete continues in effect. If the future company buys the assets, the Non-Compete is terminated. I would request a sentence be added to the effect that "if there is a change of control of the Company (meaning more than 50% of the equity interest or 50% of the voting equity control) is sold or transferred, then this Non-Compete Agreement is terminated.