Restrictive covenants to not compete, or non-compete agreements, are one in every of a wide range of instruments corporations use to guard their commerce secrets and techniques and aggressive benefit. Nevertheless, whether or not a court docket will implement a restrictive covenant varies extensively throughout jurisdictions, together with throughout states inside the Fifth Circuit. For instance, the Louisiana statute governing restrictive covenants applies a two-year durational restrict, whereas Mississippi frequent regulation applies a extra common ‘affordable and particular’ commonplace to the period and geographic scope of a restrictive covenant. As well as, Mississippi courts should steadiness the rights of the employer, the worker, and the general public when imposing restrictive covenants. Buses. Commc’ns, Inc. v. Banks, 91 So. 3d 1, 11 (Miss. Ct. App. 2011), aff’d, 90 So. 3d 1221 (Miss. 2012).
Texas applies related elements, however courts have “allotted with a number of elements completely” the place the restrictive covenant was “fairly slender to guard an organization’s enterprise curiosity or goodwill.” Direct Biologics, LLC v. McQueen, No. 1:22-CV-381-SH, 2022 WL 1409984, at *9 (WD Tex. Could 4, 2022). For instance, in Totino v. Alexander & Associates, Inc., the court docket enforced a restrictive covenant regardless that it didn’t comprise a geographic limitation. No. 01-97-01204-CV, 1998 WL 552818, at *3-4 (Tex. App. Aug. 20, 1998). The court docket reasoned that the restrictive covenant was fairly slender, regardless of no geographic limitation, as a result of it was restricted to communications with former shoppers with whom the previous workers had labored. ID.
| state | Legislation Governing Restrictive Covenants | Restrictive Covenants Are Enforceable If the Covenant Is: |
| Louisiana | La. Rev. stats. Ann. 23:921 | Restricted to a two-year period; Features a checklist of the geographic areas wherein the previous worker is restrained; Restricted to stopping competitors between the previous worker and employer. |
| Mississippi | See, eg, Buses. Commc’ns, Inc. v. Banks, 91 So. 3d 1, 11 (Miss. Ct. App. 2011), aff’d, 90 So. 3d 1221 (Miss. 2012) | Affordable and particular in period; Affordable and particular in geographic scope. |
| Texas | Tex. Buses. & Com. Code Ann. 15.50, 15.52 | Ancillary to or a part of an in any other case enforceable settlement on the time the settlement is made; Fairly restricted as to time; Fairly restricted as to geographical space; Fairly restricted as to the scope of exercise to be restrained. Restricted to what’s needed to guard the employer’s goodwill or different enterprise curiosity. |