State-Specific Non-Compete Laws: Non-compete laws vary significantly by state. Some states like California largely prohibit non-competes, while others have specific requirements for enforceability. Recent state law trends show increasing limitations on non-compete agreements.
Federal Antitrust Laws: Key federal regulations including Sherman Antitrust Act, Federal Trade Commission regulations, and Biden Administration's Executive Order on promoting competition must be considered.
Federal Employment Laws: Essential employment regulations including Fair Labor Standards Act (FLSA) and National Labor Relations Act (NLRA) that may impact non-compete provisions.
State Employment Laws: State-specific employment regulations that may affect the enforceability and terms of non-compete agreements.
Contract Law Principles: Fundamental contract law requirements including consideration, reasonableness standards, and proper contract formation requirements.
Geographic Scope Requirements: The geographic limitation must be reasonable, specific, and aligned with legitimate business interests to be enforceable.
Time Duration Requirements: Time restrictions must be reasonable, typically ranging from 6 months to 2 years, and justified by legitimate business needs.
Scope of Restricted Activities: The activities restricted must be specific, related to actual competition, and protect legitimate business interests.
Trade Secrets Protection: Consideration of trade secrets protection under the Uniform Trade Secrets Act and Defend Trade Secrets Act in relation to non-compete provisions.
