As noted above, CNCs are used in four general contexts, including: (1) employment agreements, (2) franchise agreements; (3) partnership agreements; and (4) business sales agreements. Although a common thread of ‘reasonableness’ connects courts’ tests of the legality of CNCs in all four settings, many states view CNCs in employment agreements more harshly than CNCs in franchise agreements. These courts generally view CNCs in franchise agreements to be legally equivalent to those in business sales agreements. In so doing, such courts embrace the rationale that employees need more protection from CNCs than business sellers and franchisees.
Unfair Noncompete Agreements
- Overview
- Legal Background of Noncompete Agreements
- Modern Legal Analysis of Noncompete Agreements
- Not All Noncompete Agreements Are Equal Under the Law
- The Distinction Between In-Term and Post-Term Noncompete Agreements
- Rationales for the Use of Noncompete Agreements
- Recent Empirical Analyses of Noncompete Agreements
- Selected Cases and Individual State Laws on Franchise Noncompete Agreements
- Recommendations for Future Analysis of Franchise Noncompete Agreements
- Action Steps for Clients and Potential Clients Regarding Noncompete Agreements
