Non-Compete - Across state lines

[CuriousandCurioser]

Jurisdiction

Indiana

So I have a non compete in place with my current employer, but the parent company is in another state.

A. How enforceable is said non compete, both in Indiana, and across state lines?

B. What is considered "reasonable consideration" when it comes to employment in my chosen field, when the non compete is technically managed in another state?

Happy to answer any follow up.

 

[zddoodah]

the parent company is in another state.

Why do you think that matters?

How enforceable is said non compete, both in Indiana, and across state lines?

No one here has read your agreement, so no one could possible hazard even a guess. Also, "across state lines" doesn't mean anything. Are you asking for answers that relate to all 49 other states?

What is considered "reasonable consideration" when it comes to employment in my chosen field

Considered by whom? What "chosen field"? Why do you think this matters?

the non compete is technically managed in another state?

What does this mean?

In addition to the above questions, please explain why you're asking. Are you considering doing something that you think might violate the agreement?

 

[army judge]

So I have a non compete in place with my current employer, but the parent company is in another state.

A. How enforceable is said non compete, both in Indiana, and across state lines?

B. What is considered "reasonable consideration" when it comes to employment in my chosen field, when the non compete is technically managed in another state?

Happy to answer any follow up.

How Does Indiana Handle Non-Compete Agreements?


Indiana uses common law, which is a malleable system of reasoning developed by judges, based on the rulings of cases over the years. What this means is that if case X has similarities to many non-compete cases in the past, then the judge's ruling will likely follow the conclusion of those previous cases. This is not to say that a plaintiff or defendant doesn't have any agency in the judge's decision. Both sides still have the right to present arguments and evidence, however many cases are settled before they get the chance to move into the courtroom.



How Does Indiana law determine if a non-compete is enforceable?


Ultimately, the judge presiding over the case will decide if the non-compete in question is reasonable. He or she considers a handful of factors when making this decision, such as:



Are the stipulations in an agreement necessary to protect an employer's interest?
How much do the limitations in a non-compete affect the employee?
How great an impact might the agreement have on public interest?
What is the duration of the agreement?
What is the geographic limitation of the agreement?
What specific activities are limited by the agreement?


As mentioned above, since common law governs non-compete disputes, there are no hard and fast rules for any of these factors. However, geographic and duration restrictions tend to be similar within a given profession and location. For example, a dentist's office in a rural town might have a new dentist sign a non-compete that includes a 5-year, 20-mile radius clause, effectively banning that new dentist from leaving and starting his or her own practice in the same town; versus an agreement for an office in a major metropolitan area that lists one-half mile and three years.



When considering more opaque or subjective factors such as the potential short and long-term effect on the employee and the public's or employer's interests the judge's decision will ultimately come down to a combination of past rulings and how well each side presents its argument. If an employee goes to another company within the same field but has a role that is completely different, such as a salesman moving into an engineer position, this creates a grey area where the employee has information about the past company, but won't be using the skillset gained at the previous company



Furthermore, the agreement can't go against established public policy, such as creating a monopoly over a workforce, keeping an employee from leaving a job, or be illegal in any way.



What Is Considered "Reasonable" For Non-Compete Duration And Geographic Scope?


The biggest factors influencing duration and geographic scope in Indiana non-compete agreements are 1) The current and potential operational area of a company, and 2) the degree of specialization and knowledge required by the role.



Geographic area: The geographic area of a non-compete agreement must be appropriate for the area the company operates in to be enforceable. A good rule of thumb is that restriction extends to the immediate area the company normally does business, and possibly beyond if the company is in the process of expanding. This can become complicated for businesses that operate throughout the country or overseas and for employees that regularly travel. In the end, the courts must weigh the legitimate interests of the company against the potential hardship of the employee.



Duration: Durations of three to five years are common amongst non-compete agreements. However, the more focused the role and specific the knowledge, the longer a non-compete agreement may be enforceable. If an employee has intricate knowledge of a tech company's processes, that information could significantly damage the company's competitive advantage. This scenario is also crossing over into intellectual property rights violations.



What Options Are Available To Enforce A Non-Compete In Indiana?


Any employer can require a new employee to sign a non-compete agreement as a stipulation of employment. The employee has the right to negotiate the terms of the agreement, but in the end, the employer can deny employment if the new hire declines to sign. Existing employees cannot be "forced" to sign a non-compete unless there is consideration, offer, and acceptance. This also occurs for a new employee, but it is implied in the new-hire agreement. In both situations, the new, or existing, employee and the employer both get something in the exchange. An existing employee will usually be given a promotion, new position, more money, etc. and in exchange, the company will require the non-compete or an updated version of the existing non-compete.



In a dispute over an Indiana non-compete agreement, it falls on the employer to prove that a clear violation of its non-compete agreement has occurred. While it may seem like there are a lot of opportunities for the employee to win in an non-compete case, in general, the courts will uphold a reasonable contract, mostly because the employee in signing the contract, legally agreed to the terms.



The company can seek remedies in the form of restitution for actual loss of profit or damages to the company's value, liquidated damages, or injunctions against the former employee and his or her new company.



If a former employee has violated his or her non-compete agreement, or you feel your company is holding you to an unreasonable agreement, contacting a business attorney is the first step in getting the dispute resolved.

https://www.oflaherty-law.com/learn-about-law/indiana-non-compete-agreements-explained

<=========================>


The Enforceability of Non-compete Agreements in Indiana
by Laura L. Maser

At the outset of hiring a new employee, a common practice is to have the new employee sign a non-compete agreement. Generally, these types of agreements will prohibit an employee from working for another company in direct competition against their employer. This is to protect confidential information, trade secrets and goodwill from being used at competing businesses. While these types of agreements are commonplace at the outset of many types of employment, the enforceability of said agreements can sometimes be called into question. It is important for employers to know how Indiana courts have handled non-compete agreement enforceability in the past to ensure their agreements are in line with court enforcement.

In general, Indiana courts disfavor non-compete agreements because they can be seen as a restraint on trade. However, non-compete agreements meeting a two-prong test can be, and often are, enforceable.

1. Protected Business Meeting Interest

The first step in determining the enforceability of a non-compete agreement is whether or not the business has a protected interest. This might seem vague, but there are two categories that are usually considered protected business interest:

● Confidential Information or Trade Secrets: A business's confidential information or trade secrets can be protected through a non-compete agreement. This type of information can include financial information, marketing strategies, customer information, or other unique approaches a business uses in conducting their business.

● Business/Customer Relationship Preservation: Businesses thrive through their customers or users. A non-compete agreement can be used to protect the relationship a business has with its customers. Former employees can be prohibited from taking customers from a business when they leave the business. Former employees can also be prohibited from soliciting customers and trying to get them to leave their current business. Indiana courts have also held that "goodwill" developed with customers is a protected interest.

2. Scope of the Restrictions

The second step in determining the enforceability of a non-compete agreement is the scope of the agreement and restrictions that are placed on an individual. A non-compete agreement cannot severely limit an employee from working elsewhere, nor may the agreement be so broad that the restrictions on the former employee's interests are also not protected. Restrictions on employment type are generally limited to the scope of work the previous employee did for the company, and must be of a reasonable duration.

When drafting non-compete agreements for employees to sign, it is important to keep in mind the above two-step process in the event that the validity or enforceability of it is challenged by a former employee seeking employment elsewhere. Making sure that the non-compete agreement is not overly broad, has reasonable restrictions, and is clear can help reduce the chances that its enforceability is challenged. Each case is unique, however, and must be examined independently.

Call a Lawyer for Information Specific to You

The employment law attorneys at Beers Mallers Backs & Salin, LLP are here to help draft agreements between a business and its employees that are designed to reduce the likelihood of the agreements being challenged in court. Contact us today for all your employment law needs.


The Enforceability of Non-compete Agreements in Indiana by Laura L. Maser
<:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::>

 

[CuriousandCurioser]

How Does Indiana Handle Non-Compete Agreements?


Indiana uses common law, which is a malleable system of reasoning developed by judges, based on the rulings of cases over the years. What this means is that if case X has similarities to many non-compete cases in the past, then the judge's ruling will likely follow the conclusion of those previous cases. This is not to say that a plaintiff or defendant doesn't have any agency in the judge's decision. Both sides still have the right to present arguments and evidence, however many cases are settled before they get the chance to move into the courtroom.



How Does Indiana law determine if a non-compete is enforceable?


Ultimately, the judge presiding over the case will decide if the non-compete in question is reasonable. He or she considers a handful of factors when making this decision, such as:



Are the stipulations in an agreement necessary to protect an employer's interest?
How much do the limitations in a non-compete affect the employee?
How great an impact might the agreement have on public interest?
What is the duration of the agreement?
What is the geographic limitation of the agreement?
What specific activities are limited by the agreement?


As mentioned above, since common law governs non-compete disputes, there are no hard and fast rules for any of these factors. However, geographic and duration restrictions tend to be similar within a given profession and location. For example, a dentist's office in a rural town might have a new dentist sign a non-compete that includes a 5-year, 20-mile radius clause, effectively banning that new dentist from leaving and starting his or her own practice in the same town; versus an agreement for an office in a major metropolitan area that lists one-half mile and three years.



When considering more opaque or subjective factors such as the potential short and long-term effect on the employee and the public's or employer's interests the judge's decision will ultimately come down to a combination of past rulings and how well each side presents its argument. If an employee goes to another company within the same field but has a role that is completely different, such as a salesman moving into an engineer position, this creates a grey area where the employee has information about the past company, but won't be using the skillset gained at the previous company



Furthermore, the agreement can't go against established public policy, such as creating a monopoly over a workforce, keeping an employee from leaving a job, or be illegal in any way.



What Is Considered "Reasonable" For Non-Compete Duration And Geographic Scope?


The biggest factors influencing duration and geographic scope in Indiana non-compete agreements are 1) The current and potential operational area of a company, and 2) the degree of specialization and knowledge required by the role.



Geographic area: The geographic area of a non-compete agreement must be appropriate for the area the company operates in to be enforceable. A good rule of thumb is that restriction extends to the immediate area the company normally does business, and possibly beyond if the company is in the process of expanding. This can become complicated for businesses that operate throughout the country or overseas and for employees that regularly travel. In the end, the courts must weigh the legitimate interests of the company against the potential hardship of the employee.



Duration: Durations of three to five years are common amongst non-compete agreements. However, the more focused the role and specific the knowledge, the longer a non-compete agreement may be enforceable. If an employee has intricate knowledge of a tech company's processes, that information could significantly damage the company's competitive advantage. This scenario is also crossing over into intellectual property rights violations.



What Options Are Available To Enforce A Non-Compete In Indiana?


Any employer can require a new employee to sign a non-compete agreement as a stipulation of employment. The employee has the right to negotiate the terms of the agreement, but in the end, the employer can deny employment if the new hire declines to sign. Existing employees cannot be "forced" to sign a non-compete unless there is consideration, offer, and acceptance. This also occurs for a new employee, but it is implied in the new-hire agreement. In both situations, the new, or existing, employee and the employer both get something in the exchange. An existing employee will usually be given a promotion, new position, more money, etc. and in exchange, the company will require the non-compete or an updated version of the existing non-compete.



In a dispute over an Indiana non-compete agreement, it falls on the employer to prove that a clear violation of its non-compete agreement has occurred. While it may seem like there are a lot of opportunities for the employee to win in an non-compete case, in general, the courts will uphold a reasonable contract, mostly because the employee in signing the contract, legally agreed to the terms.



The company can seek remedies in the form of restitution for actual loss of profit or damages to the company's value, liquidated damages, or injunctions against the former employee and his or her new company.



If a former employee has violated his or her non-compete agreement, or you feel your company is holding you to an unreasonable agreement, contacting a business attorney is the first step in getting the dispute resolved.

Indiana Non-Compete Agreements Explained

<=========================>


The Enforceability of Non-compete Agreements in Indiana
by Laura L. Maser

At the outset of hiring a new employee, a common practice is to have the new employee sign a non-compete agreement. Generally, these types of agreements will prohibit an employee from working for another company in direct competition against their employer. This is to protect confidential information, trade secrets and goodwill from being used at competing businesses. While these types of agreements are commonplace at the outset of many types of employment, the enforceability of said agreements can sometimes be called into question. It is important for employers to know how Indiana courts have handled non-compete agreement enforceability in the past to ensure their agreements are in line with court enforcement.

In general, Indiana courts disfavor non-compete agreements because they can be seen as a restraint on trade. However, non-compete agreements meeting a two-prong test can be, and often are, enforceable.

1. Protected Business Meeting Interest

The first step in determining the enforceability of a non-compete agreement is whether or not the business has a protected interest. This might seem vague, but there are two categories that are usually considered protected business interest:

● Confidential Information or Trade Secrets: A business's confidential information or trade secrets can be protected through a non-compete agreement. This type of information can include financial information, marketing strategies, customer information, or other unique approaches a business uses in conducting their business.

● Business/Customer Relationship Preservation: Businesses thrive through their customers or users. A non-compete agreement can be used to protect the relationship a business has with its customers. Former employees can be prohibited from taking customers from a business when they leave the business. Former employees can also be prohibited from soliciting customers and trying to get them to leave their current business. Indiana courts have also held that "goodwill" developed with customers is a protected interest.

2. Scope of the Restrictions

The second step in determining the enforceability of a non-compete agreement is the scope of the agreement and restrictions that are placed on an individual. A non-compete agreement cannot severely limit an employee from working elsewhere, nor may the agreement be so broad that the restrictions on the former employee's interests are also not protected. Restrictions on employment type are generally limited to the scope of work the previous employee did for the company, and must be of a reasonable duration.

When drafting non-compete agreements for employees to sign, it is important to keep in mind the above two-step process in the event that the validity or enforceability of it is challenged by a former employee seeking employment elsewhere. Making sure that the non-compete agreement is not overly broad, has reasonable restrictions, and is clear can help reduce the chances that its enforceability is challenged. Each case is unique, however, and must be examined independently.

Call a Lawyer for Information Specific to You

The employment law attorneys at Beers Mallers Backs & Salin, LLP are here to help draft agreements between a business and its employees that are designed to reduce the likelihood of the agreements being challenged in court. Contact us today for all your employment law needs.


The Enforceability of Non-compete Agreements in Indiana by Laura L. Maser
<:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::>

Thank you army judge for this answer. This was MUCH more helpful than the first response which proved to offer no valuable information. Very much appreciated.

 

[CuriousandCurioser]

Why do you think that matters?




No one here has read your agreement, so no one could possible hazard even a guess. Also, "across state lines" doesn't mean anything. Are you asking for answers that relate to all 49 other states?




Considered by whom? What "chosen field"? Why do you think this matters?




What does this mean?

In addition to the above questions, please explain why you're asking. Are you considering doing something that you think might violate the agreement?

Appreciate the attempt. But if I knew the answers to this, I wouldn't be here asking.