New Hampshire’s recent enactment of legislation relating to non-compete agreements serves as a reminder to employers that if not properly drafted, restrictive employment covenants such as non-compete, non-solicitation, and non-disclosure agreements may be unenforceable.
A “non-compete” agreement prohibits employment in a specific industry, for a specific amount of time, in a specific geographic area. A “non-solicitation” agreement prohibits solicitation of customers and co-workers. And a “non-disclosure” identifies and protects against disclosure of an employer’s confidential or proprietary information. Generally, employers should keep in mind that these restrictive employment covenants are enforceable only if the restriction is reasonable in scope, geographically, and temporally.
New Hampshire’s law requires employers to provide applicants with any non-compete agreement when making an offer of employment or to employees when making an offer of change in job classification. If the non-compete agreement is not provided when making such offer, the agreement will be unenforceable. This is one example of how state laws regarding restrictive employment covenants are becoming increasingly employee-protective. Complicating matters further, such laws vary state-to-state. Therefore, employers with employees in multiple states may find it challenging to use a uniform non-compete or other restrictive employment covenants agreement for all of their employees.
As this is an evolving area of employment law that varies state-to-state, employers should consult with their employment counsel when drafting, administering, and attempting to enforce restrictive employment covenants such as non-compete, non-solicitation, and non-disclosure agreements.