For the technology company, a non-compete obligation would serve a legitimate business objective as long as the new technology remains on the cutting edge of technology. But if the duration of the non-compete obligation exceeds this point, the commercial interest is reduced. Thus, the “reasonableness” of scope, time and geographical restrictions is determined in part on the basis of the legitimate business objective that the employer is attempting to protect. Because of these competing interests, non-compete obligations must contain restrictions. As a rule, they are limited by scope, geography and time. The term “scope” refers to the areas in which the former employee is prevented from working. A non-competition clause cannot say that a former employee “will never be able to work in this city again.” As a general rule, it should be limited to areas in which the former employer is active. For example, a pharmaceutical company might be able to prevent a former employee from working for another pharmaceutical company, but probably could not prevent the former employee from teaching at a pharmacy school. Most states allow non-compete obligations, although they are generally viewed with suspicion. In deciding whether an individual agreement is enforceable, the court usually considers (1) the potential threat to the employer; (2) the difficulties that would be imposed on the employee if the agreement were applied; 3. whether the agreement is supported by appropriate scrutiny; and (4) if there is a public interest in preventing law enforcement. So how will Tennessee courts interpret and enforce non-compete rules during a pandemic — a harshness that neither party has created? I believe they will always use the same factors, but I guess they can look at them through a “pandemic lens.” Consideration will always be required to have a binding agreement, and employers will still need to demonstrate that they have a protectable business interest.

But I predict that the difficulties for the worker will be more taken into account and that the courts will interpret the restrictions more narrowly than before. Keep in mind that Tennessee courts already interpret restrictions narrowly after termination of employment. This is because they do not like trade restrictions, but they will enforce the agreement of the parties if the restrictions are manifestly necessary and appropriate. This is also due to the fact that the employer usually drafts the agreement and any ambiguity in the language can be interpreted against the author, since he had the opportunity to avoid ambiguity. But with so many unemployed, many businesses not even in operation and the job pool drying up, I suspect the courts will be inclined to apply the restrictions even more narrowly than in the past. Whether protecting a customer list is a legitimate business purpose depends largely on how difficult it is for someone outside the company to create the list. If the list was developed solely through online searches or telephone directory searches, the protection of the list is less like a legitimate objective than a pretext to restrict fair competition. Again, the indication of a commercial object alone is not sufficient for an enforceable agreement; the objective must be legitimately necessary to protect the undertaking so that competitors, if not protected, gain an unfair advantage. Historically, non-compete obligations under the English common law system, which has been widely adopted in the United States, have been considered an unenforceable restriction on trade. The common law favoured competition in the free market and the right of workers to earn a living as more important than a company`s right to protect itself from potentially unfair competition. In more modern times, courts have begun to view non-compete obligations more as a private contractual matter between employer and employee and less as a matter of public policy.

If the former employee refuses to comply with the cease and forbearance letter, the company`s next step is to file a breach of contract lawsuit and seek enforcement of the non-compete. In the lawsuit, the court is asked to issue an injunction – a court order ordering the former employee to cease any other conduct that violates the non-compete obligation – as well as a judgment on the amount of financial damages, if any, suffered by the company as a result of the non-compete violation. If faced with such a lawsuit, the former employee should hire an experienced lawyer if he or she wishes to challenge the application of the non-compete obligation. The “adequacy” of the scope, time and geographical restrictions of an agreement depends on the nature of the employer`s business and the interest to be protected. A non-competition clause that prohibits an employee from working again in a field where the employer operates will almost never be enforceable, even if its scope and scope are narrowly limited. Similarly, it generally does not make sense to prohibit a former employee from working in a geographic area where the former employee does not have a business presence. it is also unreasonable to prohibit the employee from working in a field of activity in which the employer is not active. In this way, a non-compete obligation could be enforceable in favour of a large undertaking operating in a wide range of areas on a national scale if the same agreement, if it applies in favour of a more limited regional undertaking, may not be enforceable. Proponents of enforcement of the non-competition law note that knowledge has become an increasingly important part of a company`s assets in an information-based economy. Companies should have the right to protect their intellectual property and know-how because they have invested time and resources in their development. Similarly, proponents argue that a company that has invested years in developing good customer relations should not risk losing goodwill if a key employee defects from a competitor.

And it would not be fair to allow a competitor to reap the rewards of specialized training offered to an employee at the expense of the former employer. According to this reasoning, the refusal to apply the non-compete obligations will discourage employers from investing resources in the development of their employees. If an employer believes that a former employee is in breach of a non-compete obligation, it must first decide whether the application of the agreement is worth it and the potential legal costs. The former employee may technically violate the agreement, but the violation does not cause any real harm to the employer. In this situation, it would not make sense for the employer to spend money on a lawyer if no real benefit can be obtained by applying the agreement. Tennessee courts take a hesitant approach to enforcing non-compete obligations. Such agreements, which are considered trade restrictions, are rejected and always interpreted in favor of the former employee. Fortunately for employers, the terms of a non-compete agreement are enforced if they deem it appropriate by a court. Unfortunately, there is no rigid formula for employers – who generally prefer legal predictability – to determine whether a non-compete agreement is appropriate. On the contrary, the appropriateness of a particular non-compete obligation implies an examination of the specific facts and circumstances of an employment relationship.

However, several unwavering principles have emerged that can guide employers in developing anti-competitive agreements that effectively protect their interests. In the case of most non-compete obligations, the consideration takes the form of an offer of employment. In return for the hiring of the employee by the employer, the latter accepts the terms of the non-compete obligation. The non-compete obligation may be included in an employment contract, or it may be a separate document signed at the beginning of the employment. .