Attorneys commanding in-depth business experience and providing clients with comprehensive services must operate across a broad realm of opportunities and challenges.

One on-point website spotlighting full-service advocacy spanning the universe of business concerns puts it the following way. It notes that a deep legal team must always be prepared to provide its customers with “results-oriented representation to effectively navigate the modern legal and business environments.”

Those environments are highly varied.

And they are ever-evolving. In the realm of commercial litigation, for example, they range widely from management disputes, contractual breach and intellectual property infringement to lease issues, construction glitches and regulatory compliance challenges. In between, there are literally scores of other possibilities.

One of those focuses narrowly on the potentially adverse behavior of key workers after they terminate employment with a company. Such employees often worked at an enterprise for years and at an upper-tier level. That gave them inside access to proprietary business data and other closely guarded information.

How can that continue to be protected if a worker with knowledge of trade secrets and other valuable data (e.g., designs, customer lists, software/algorithms and business plans) links up with a business rival? What if that individual seeks to employ inside knowledge of those things to compete directly with a former employer?

Spotlighting the protective role of noncompete agreements

Well-developed American law provides concerned Arkansas employers and their counterparts nationally with protections against such a possibility. Courts have long acknowledged that an unchecked ex-worker can in some instances inflict material damage on a former employer if not reasonably limited in his or her ability to do so in a new role.

Noncompete agreements safeguard against that risk. A noncompete — often executed between an employer and worker when the latter first commences employment — places restrictions on a worker’s use of learned confidential information outside the company, especially at a post-termination stage.

The key assessment used in gauging the enforceability of a noncompete agreement is grounded in the above-referenced “reasonably limited” language, which we touch on below.

Key factors courts scrutinize when evaluating noncompetes

Can an employer contractually mandate that an ex-employee never work for a competitor anywhere in the United States or that safeguarded data must be perpetually protected even if it loses all value?

Absolutely not. Judicial oversight of a noncompete agreement will not lead to such a conclusion. Courts take a hard look at such contracts, with enforcement hinging on the following:

  • A legitimate business interest must be at stake
  • Reasonableness must permeate the contract, based on scope, time and geographical application

Noncompetes are essentially balancing instruments. A court will concede an employer’s need to protect confidential agreement, while at the same time noting an ex-worker’s right to be gainfully employed.

Employers with questions or concerns regarding such agreements often reasonably turn to proven commercial attorneys for guidance and studied input.