One of the basic requirements for contracts, including non-compete agreements, is that the contract/non-compete be supported by “valuable consideration.” Valuable consideration may consist of “some right, interest, profit or benefit accruing to one party or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other.” Simply put, if a party is to be bound to his promise, he must receive something in exchange such as money or another promise. An employer can condition an offer of employment on an employee’s signing a non-compete; but what about employees who already have a job?
South Carolina’s unemployment rate has hit 9.5%, and all indications are that it will continue to rise. And as hard as it is for the unemployed to find a job, for too many it is made even more difficult because of a noncompete, which prohibits the unemployed person from working in the field she has the most and/or the most recent experience. The third prong in a court’s evaluation of enforceability is whether enforcement of the noncompete would be “unduly harsh and oppressive in curtailing the legitimate efforts of the employee to earn a livelihood.” As with most questions of fact, context is critical, and it would seem particularly so on this question. Continue reading