Non Compete Agreement Indiana Law
Duration: Terms of three to five years are common in the case of non-compete obligations. However, the more specialized the role and the more specific the knowledge, the more enforceable a non-compete obligation can be. If an employee has in-depth knowledge of a technology company`s processes, this information can significantly affect the company`s competitive advantage. This scenario also turns into infringements of intellectual property rights. By the way, the same provisions can be found in independent contractor agreements and agreements on the sale/purchase of a business, both in share purchase and asset purchase contracts. However, the analysis of contractor and company purchase agreements is different from how the courts review agreements that affect employees. The main factors that affect the duration and geographic scope of Indiana`s non-compete obligations are 1) the current and potential area of activity of a company, and 2) the degree of specialization and knowledge required for the role. A medical sales representative signed a non-compete agreement when he joined a medical device company. He then hired a second medical device company as vice president, and then hired several employees from the first company. This violated their previous agreement with the employee. If there is a non-compete obligation in your separation agreement that is effectively enforceable, your employer can take legal action against you for breach of your contract. You can claim financial damages or, more commonly, an injunction.
That is, if the court confirms the contract, the employee must leave his new employer and continue to follow the terms of the agreement. Just as you are held responsible for what you sign, so is your employer. If your employer violates your employment contract – which also includes a non-compete agreement – the non-compete obligation may not be enforceable. By the way, make sure that every term you negotiate with your employer is written into your contract. Although verbal contracts are legally binding, they can be difficult to prove. In an employment contract, there are generally three different types of restrictions: An obligation not to competeA commitment not to recruit customers, employees or suppliersIdentity or protection of trade secrets for the employer ● Confidential information or trade secrets: Confidential information or trade secrets of a company may be protected by a non-compete obligation. This type of information may include financial information, marketing strategies, customer information, or other unique approaches that a company uses in conducting its business. For example, many employers regularly require new employees to sign non-compete agreements in Indiana, not to mention that many employment contracts also include non-compete obligations. The second step in determining the enforceability of a non-compete obligation is the scope of the agreement and the restrictions imposed on a person.
A non-compete obligation must not seriously prevent an employee from working elsewhere, nor should the agreement be so broad that restrictions on the former employee`s interests are also not protected. Restrictions on the type of employment are generally limited to the amount of work that the previous employee performed for the company and must be of reasonable duration. The State Supreme Court concluded, inter alia, that the agreement was unenforceable. On the one hand, it prohibited the employee from hiring an employee at any level of the first company to perform any type of work. These likely included office cleaners, truck drivers, and others. Its scope is too broad, the court said. All the company could do now was adopt better non-compete clauses in the future. A few years ago, when you accepted your current job, you were happy to sign all the papers presented to you by your new employer. Now, when you consider a change, you realize that one of these many documents was a non-compete obligation. Will this prevent you from moving forward in your career? Is there a way out? In this blog, the CCAA explores three legal ways to challenge a non-compete obligation. Indiana courts have long held that non-compete obligations in employment contracts are generally rejected by law and therefore must be carefully considered before being enforced.
Indeed, post-employment restrictions – such as non-compete obligations – are examined with particular attention, as they are often the result of unequal bargaining power and because an employee is likely to pay little attention to the difficulties he or she may face later after losing his or her job. The labor lawyers at Beers Mallers Backs & Salin, LLP are there to help draft agreements between a company and its employees that are designed to reduce the likelihood that the agreements will be challenged in court. Contact us today for all your employment needs. Previously, the “blue pencil” doctrine was used by trial courts to strike out or separate inappropriate and divisible parts of a restrictive covenant, leaving behind the remaining reasonable and enforceable parties. The courts of first instance would therefore strike, but would not rewrite bad contractual wording. The blue pencil doctrine has not been used by trial courts to “rewrite a non-compete agreement by adding, modifying or reorganizing terms.” The Zimmer-Kolbe agreement gave a court the power to “reform” the agreement to make any unenforceable provision enforceable. Essentially, the Zimmer-Kolbe agreement gave a court the power to rewrite the agreement. The Indiana Supreme Court held that the “blue pencil” doctrine could not be extended in this way and that the Zimmer-Kolbe agreement could not legally delegate to a trial court the power to “fix” an overly broad restrictive agreement by rewriting the wording of the contract. The Supreme Court has held that only the parties to a contract can draft their agreement and that the courts should not write in a contractual language that the parties themselves have not accepted and that they have not accepted in the original version.
Indiana uses the common law, a malleable reasoning system developed by judges and based on case decisions over the years. This means that if the X case has similarities with many non-compete obligations in the past, the judge`s decision will likely follow the conclusion of those earlier cases. This is not to say that a plaintiff or defendant does not have freedom of choice in the judge`s decision. Both parties still have the right to present arguments and evidence, but many cases are settled before they have a chance to enter the courtroom. In a dispute concerning a non-compete obligation in Indiana, the onus is on the employer to prove that there has been a clear breach of its non-compete obligation. While it may seem that there are many ways for the employee to win in a non-compete obligation, the courts will generally maintain an appropriate contract, mainly because the employee legally agreed to the terms when signing the contract. .
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