Noncompete agreements, trade secrets and protecting company information — North Carolina

Noncompete enforcement in North Carolina

Covenants not to compete governed by North Carolina law must satisfy both statutory requirements as well as the court decisions that interpret this law. As a general rule, these covenants are disfavored by the courts and can be difficult to enforce unless they strictly adhere to the legal requirements of enforceability. Each of the following requirements has been defined by court decisions. North Carolina law provides that noncompetition agreements are enforceable only if they are:

• written and signed by the employee

• part of an employment agreement

• based on valuable consideration

• reasonable as to time and geography

• not against public policy (e.g., designed to protect a legitimate business interest of the employer).

Valuable consideration

An initial offer of employment will serve as valuable consideration provided that the noncompetition agreement is executed at that time. Where the initial employment relationship is entered into without negotiation of the noncompetition terms, then additional consideration is necessary. A...

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