Agreements Not To Compete in Wisconsin and TexasJuly 27th, 2010
FiledJuly 27th, 2010An agreement not-to-compete is a covenant between an employer and an employee that, after termination of employment, the employee will not compete with the former employer for a prescribed time-period and within a prescribed geographic area.2 Non-compete agreements provide at least a partial restraint on trade and, therefore, the legal system struggles to balance the restraint agreements against the free market economy.3 A non-compete agreement is not meant to punish an employee but rather protect the employer from unfair competition.4 However, the courts will consider an agreement that imposes a restraint that is greater than is needed to protect the employer’s legitimate interests or presents a hardship to the employee or the public as an unreasonable restraint of trade.5 Proponents of non-compete agreements argue that, without the protection of such agreements, business would be unable to stimulate research, improve business methods, and communicate internally at an effective level.