When non-compete agreements first started to be used, they needed to establish a geographic perimeter in order to be enforceable. Non-compete agreements were intended to prevent workers from going to work for the competitor across the street and taking clients, vendors, and/or proprietary secrets with them. In order to stay fair to workers while still protecting the employer, most non-compete agreements were restricted to a certain geographical range – for example, the employee could not go to work for a competitor less than 20 miles away from the employer.
Over the past few years, employers have started expanding the geographical limits in their non-compete agreements until they didn’t bother putting them in at all – in a few cases, they actually specified that the non-compete agreement was effective worldwide.
With the dawn of the Digital Age, businesses started expanding their reach across the globe, making it increasingly difficult to specify a geographical area in which they conduct business. For this reason, some U.S. courts have ruled that it’s OK for companies to leave out the geographical restrictions on a non-compete agreement, but the Nevada Supreme Court recently stated otherwise. Continue reading ›