From the NYTimes, "[t]he United States has a patchwork of rules on noncompetes. Only California and North Dakota ban them, while states like Texas and Florida place few limits on them. When these cases wind up in court, judges often cut back the time restraints if they’re viewed as unreasonable, such as lasting five years or longer. In most states there has to be a legitimate business interest, and it has to be narrowly tailored and reasonable in scope and duration."
Ethics rules generally preclude noncompetes for attorneys, but some states are allowing them within reason.
Although noncompetes are popping up everywhere, not all businesses actually need one. To determine if your business actually needs a noncompete, Findlaw recommends looking at the following:
- Protecting Trade Secrets - can you use a nondisclosure agreement instead?
- Is There a Legitimate Business Interest? - such as protecting trade secrets or confidential information or protecting long-standing customer or client relationships.
- Be Reasonable - noncompete agreement should allow ex-employees to continue their careers while still protecting your business.
If you are a potential employee that is asked to sign a noncompete agreement, Lifehacker offers some basic questions you should ask before signing the agreement.