Covenants Not to Compete
Employees with special skills and knowledge can be precluded from working for an employer's competitors after they leave their original employer. Restrictions prohibiting such postemployment competition generally are called restrictive covenants. Because restrictive covenants can significantly limit an employee's ability to earn a living, they are disfavored, and courts will not enforce them unless they serve a valid business purpose of the employer and are reasonable in scope, geographic area, and duration. In fact, in California covenants not to compete are invalid as restraints against trade and cannot be enforced unless they are given in connection with the sale of a business.
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