Sometimes businesses ask employees to sign a non-compete agreement at some point in their employment. Nebraska Courts have narrowly defined the permissible scope of covenants not to compete contained in employment agreements to include only "customer specific" restraints. For example, in Polly v. Ray D. Hilderman & Co., 225 Neb. 662, 668, 407 N.W.2d 751, 756 (1987), the Nebraska Supreme Court held that a covenant not to compete in an employment agreement "may be valid only if it restricts the former employee from working for or soliciting the former employer's clients or accounts with whom the former employee actually did business and has personal contact." (Emphasis supplied.) See, also, Boisen v. Petersen Flying Serv., 222 Neb. 239, 383 N.W.2d 29 (1986) (holding that covenant not to compete was unreasonable and unenforceable in part because employee had no personal and business-based contact with employer's customers or prospective customers).
The permissible scope of a covenant not to compete ancillary to the sale of a business is not as narrowly limited. You can see our earlier blog posting on this issue here.
Even where such a sale involves a list of specifically identified customers, there may be legitimate reasons why the purchaser must also restrict the seller from competing in a reasonably defined geographic area in order to protect the benefit of his bargain. However, such reasons must be shown in order to establish the reasonableness of a geographic restriction. There must be evidence in the record to support the contention that the seller must be restrained from competing in areas which he served prior to the sale in order to protect the value of the goodwill and trade name purchased.
Even where such a sale involves a list of specifically identified customers, there may be legitimate reasons why the purchaser must also restrict the seller from competing in a reasonably defined geographic area in order to protect the benefit of his bargain. However, such reasons must be shown in order to establish the reasonableness of a geographic restriction. There must be evidence in the record to support the contention that the seller must be restrained from competing in areas which he served prior to the sale in order to protect the value of the goodwill and trade name purchased.
If you need help drafting or determining the validity of a Nebraska non-compete agreement you should consider contacting Angela Madathil. Madathil Law Office specializes in employment law in Nebraska, and offers free consultations.
Madathil Law office serves Nebraska employment clients in Omaha, Lincoln, Lancaster County, Douglas County, Otoe, and Cass County Nebraska. If need a Nebraska employment lawyer, consider contacting Angela Y. Madathil and the Madathil Law Firm.
Contact us at angela@madathil-law.com or by telephone at 402.577.0686. The firm offers free consultations. For more information feel free to look at our website www.madathil-law.com.
Image from here.
Hi, nice post. Well what can I say is that these is an interesting and very informative topic. Thanks for sharing your ideas, its not just entertaining but also gives your reader knowledge. Good blogs style too, Cheers!
ReplyDeletenon compete lawyer ma