I had a set back recently when a judge decided to “punt” instead of making the decisions he is paid to make. I represented an employee who had been fired and whose non-compete was making it difficult for him to get another job. The language of the non-compete appeared to be extremely broad. We asked the judge to read the non-compete and decide if he agreed with us. The law is clear: Whether or not such a non-compete is reasonably limited in its operation is a question of law. Stringer v. Herron, 424 S.E.2d 547 (S.C. Ct. App. 1992)(emphasis added); see also Bicycle Transit Authority, Inc. v. Bell, 314 N.C. 219, 333 S.E.2d 299 (N.C. 1985)(“The reasonableness of a restraining covenant is a matter of law for the court to decide.”). So, when the employer argued there were “questions of fact’ the obvious response what facts do you need to read the non-compete and decide whether it is reasonable limited. Continue reading
Many non-compete agreements not only attempt to undermine competition for a company’s customers but also prevent competition for its employees. South Carolina courts have upheld covenants not to solicit employees by a former employee but only to the extent that such solicitations interfere with contractual relations. This rule makes much more sense than those applied to solicitation of customers.
So, what happens when the state identified in a non-compete’s choice of law is different than the state in which the agreement will be enforced? In Stonhard v. Carolina Flooring Specialists, Inc. 366 S.C. 156, 621 S.E.2d 352 (2005) the court held that although a choice of law provision would permit a non-compete to be construed in accordance with another state’s law, if the non-compete was invalid under South Carolina law, it would not be enforced. “Terms in a non-compete agreement may be construed according to the law of another state. Standard Register Co. v. Kerrigan, 238 S.C. 54, 70-71, 119 S.E.2d 533, 541-42 (1961). But if the resulting agreement is invalid as a matter of law or contrary to public policy in South Carolina, our courts will not enforce the agreement.” Continue reading