How do I know if my company`s non-compete agreements are fragile? For non-competition, labour disputes or labour law, please contact Ziegler and Schneider today at (859) 426-1300. Non-competition agreements must be reasonable. They cannot last too long, cover too much geographic area or prohibit former employees from operating too many types of businesses. The applicability of a non-competition agreement may also depend on the nature of the sector. Some sectors are much more open than others when it comes to information exchange, making them less likely to limit non-invitations or confidentiality agreements. The Kentucky Supreme Court ruled that the agreement was not applicable because the employee had not received any consideration for the signing. In the Tribunal`s view, maintaining employment in the company does not constitute a counterpart to an enforceable non-compete clause. Non-compete bans in Kentucky. Courts generally do not favour non-competition prohibitions. Indeed, some states, such as California, have passed laws effectively prohibiting the use of non-competition rules. What does Kentucky`s non-competition ban law say? In a major 2014 decision, the Kentucky Supreme Court clarified the Non-Competition Act in a case called Charles T.
Creech, Inc. v. Brown. Clearly, agreements under Kentucky laws that do not compete may deter companies that lose employees from losing their confidential business information. Each company wants to prevent employees who have access to sensitive information or trade secrets from passing it on to their competitors. In 2014, the Kentucky Supreme Court clarified that the agreement was unenforceable when an employer attempted to impose a non-compete agreement on an existing worker without providing additional consideration. The case was Charles T. Creech, Inc. v. Brown. When a court finds that a non-competition agreement is not appropriate for enforcement, a court retains the power to amend an existing non-competition agreement so that its restrictions are not overly broad or incriminating to the worker.
This is called the “blue pencil” rule. Creech participated in a hay and straw merchant (Creech, Inc.) who hired an e-mail branch. After 16 years of employment, Creech, Inc. asked the employee to sign a confidentiality and confidentiality agreement. No one told the employee that his continued employment depended on the signing of the agreement and that the employee had not received any financial consideration for the signing of the contract. In the years following the signing, staff were not promoted, trained or increased. In that case, the Supreme Court found that the worker had received no consideration for the agreement, so Creech, Inc. was unable to enforce that agreement after the worker left his job. Charles T.
Creech, Inc., a supplier of hay and straw to farms throughout Kentucky, employed Donald Brown as a driver, distributor and salesman. In 2006, after working for sixteen years, Brown was invited to sign an agreement containing competition and confidentiality agreements. Brown did not receive any additional financial consideration for the signing of the agreement. Shortly thereafter, Brown was transferred from his sales position to the distributor position, which, due to declining responsibilities and customer contact, was likely downgraded. Two years later, Brown resigned and took a distribution position at a competitor, standlee Hay Company.