Being wise about knowing which clauses to include in a contract will help you in the long run. This is for reason being that a contract that is not enforceable on some level could run the risks of becoming void and unenforceable. In turn, that can cost business and profit. The basic principles of materiality can change from year to year. An awareness in advance can save. We are here to help with the following list:
1. Non compete agreements are enforceable to the extent that a business interest is protected.
This has always been at the core of non compete interests. Having been at the core, means it has also been subject to scrutiny. There are plenty of court decisions that have considered this more closely which includes the fairness test as espoused in the case of White v. Mederi Caretenders Visiting Services of Southeast Florida, LLC, Case No. SC16-28 (Fla. Sup. Ct., Sep. 14, 2017). Is what the employer seeking to protect its investment or is it making it unfair for the employee to use information, relationships or resources that they acquired while employed by a former employer? That is the question and agreements will be assessed on the management of their exploitative nature.
2. Forum selection clauses are usually enforceable across the country.
Clauses that choose not to enforce another state’s law are generally enforceable unless the violation of public policy is at stake. In the case of Stone Surgical, LLC v. Stryker Corp., Case No. 16-1434 (6th Cir., May 24, 2017), an employee was subject to a non compete with Michigan choice of law and forum clause. Enforceability of such clauses was challenged when that employee transitioned to work with a competitor of the other jurisdictional state of Louisiana. It was noted on appeal at the federal level that Michigan law would favor such clauses. Continue reading