Non-Compete Agreements Must Be Reasonable

Non-Compete Agreements Must Be Reasonable

A recent decision from the North Carolina Court of Appeals underscores an important rule for non-compete agreements: they must be carefully drafted, reasonable, and tied to a legitimate business interest to be enforceable.

In Southeastern Regional Physician Services v. Scott, the Court reviewed restrictive covenants signed by two nurse practitioners. After the individuals left employment, the non-compete provisions prohibited them from “engaging in the practice of Medicine” or providing similar services.

Why the Court Found the Non-Compete Unenforceable
The Court held the restrictions were overly broad and too restrictive—meaning they went further than North Carolina law allows and improperly limited the ability of the employees to continue working in their chosen profession. Importantly, the Court also declined to “blue-pencil”** (rewrite or modify) the agreement to make it enforceable.

This is a critical takeaway for both employees and employers: in North Carolina, a non-compete is not automatically enforceable simply because someone signed it.

What North Carolina Courts Look For in Enforceable Non-Competes
Under North Carolina law, courts evaluate whether a **restrictive covenant** is valid based on factors such as:

– Reasonableness in time
– Reasonableness in scope
– Reasonableness in territory (where applicable)
– Whether the agreement protects a legitimate business interest
– Whether the restraint violates public policy

(“Covenants not to compete are valid and enforceable if they are: “(1) in writing; (2) reasonable as to terms, time, and territory; (3) made a part of the employment contract; (4) based on valuable consideration; and (5) not against public policy.”)

When those requirements aren’t met, the agreement may be found unenforceable.

How This Decision Impacts Employees and Employers
This ruling may affect anyone dealing with non-compete agreements in North Carolina, including:

– **Employees** considering a new job or practice change
– **Health care providers** and licensed professionals impacted by “practice” restrictions
– **Employers** who want to enforce or update restrictive covenants
– Parties facing **threats of enforcement** or litigation after separation

Need Help Reviewing a Non-Compete in North Carolina?
At Brian Elston Law, we review North Carolina restrictive covenants with a focus on practical outcomes and legal strategy. Our employment-law team regularly handles issues involving:

– Non-compete agreements and restrictive covenants
– Separation agreements and employment disputes
– Workplace conflicts and employment-related civil litigation

If you’re being asked to sign a non-compete, already signed one, are changing jobs, or are facing enforcement threats, we can help you understand your rights, risks, and options.

Contact Brian Elston Law

If you have questions about a North Carolina non-compete or another employment law issue, contact Brian Elston Law to discuss what steps to take next.

Former Chair of Education Law Section appreciates recognition

Former Chair of Education Law Section appreciates recognition

Education Law Chair appreciates recognition

Chad Donnahoo, former Education Law Chair with the NC Bar Association, was recognized in April 2019 for successfully completing his term as Chair.  The Education Law Section is a division of the North Carolina Bar Association that promotes education and networking among attorneys serving public schools, employees and students.  The section is comprised of over 70 attorneys state-wide.

As Chair, Chad effectively communicated with his colleagues, and apprised them of recent developments in Education Law.  Becoming Chair was a natural progression for Chad as he previously served as Vice-President, Secretary, and council member.  Chad’s membership in the section began in 2008.

The recognition by the Education Law Section now hangs proudly in his office.

What’s next for the Education Law section Chair?

Chad Donnahoo is able to bring his knowledge of Education Law to help those injured in school related incidents, such as a school bus accident or a victim of sexual abuse.  Chad is still a member and will continue to keep apprised in developments in Education Law to better serve his clients at Brian Elston Law.

Supporting students and parents in education matters

Four years ago, my spouse had to make a choice: continue in the teaching profession (as she had been doing for 10+ years) or…..provide for her family and kids the way that she wanted to. At the time the General Assembly was reducing its funding to public schools. She hadn’t had a raise in 10 years and the outlook for the teaching profession was bleak. Tears were shed at the decision….
 
Thank you to all the teachers who are headed to Raleigh today and taking the fight for increased support to the General Assembly.
 
My wife continues to support teachers and students, but in a different role than as a teacher.
 
Brian Elston Law also supports public education by representing students and parents in special education and personal injury related issues.

Student safety at school

Student safety at school should be a priority for both the parents and school administers.  In fact, North Carolina case law states “the foremost priority of a school principal is undoubtedly student safety.”   In re J.D.R., 206 N.C. App. 761, 699 S.E.2d 139 (2010).  In order to accomplish student safety, a school system should perform due diligence before individuals become employees or volunteers and then, after they are hired, adequately supervise those employees.

A recent situation involving student safety made the news.  A volunteer coach at a local public student shared an illegal substance with a student-athlete.  The situation raised concerns about how the volunteer came to possess the illegal substance on school grounds and the supervision of the volunteer.  The family retained Brian Elston Law in order to determine how this unfortunate situation could happen.

Brian Elston interviewed about school safety

What injuries are the fault of schools?

Schools must supervise their students adequately.  Payne v. N. Carolina Dep’t of Human Res., 95 N.C. App. 309, 313, 382 S.E.2d 449, 451 (1989).  A school system is liable for foreseeable injuries that result from a lack of teacher supervision. Id. In other words, if a school system could foresee that the injury could happen, then the school system has a duty to “protect the safety of students.”  Examples of injuries that could be the responsibility of school officials:

  • Negligent supervision during sporting activities, such as cheerleading events (Davidson v. Univ. of N. Carolina at Chapel Hill, 142 N.C. App. 544, 546, 543 S.E.2d 920, 922 (2001)
  • Student roughhousing when the teacher was not in classroom and knew of students proclivity to horse play;
  • Injuries during homecoming events due to failing to property set up booths;
  • Injuries that arise out of failure to supervise students.

If you or your child has concerns about student safety, please contact my office to discuss your rights and the responsibilities of the school system.

(for a follow up on the news story above see here)