Under what circumstances can a non-compete agreement be deemed unreasonable?

A non-compete agreement can be deemed unreasonable when it is indefinite in duration and very broad in geography because such limitations can excessively restrict an individual's ability to earn a livelihood. Courts generally uphold non-compete agreements only if they are reasonable in terms of duration, geographic scope, and the type of employment restricted.

When an agreement lacks a clear timeframe, it creates uncertainty and can unfairly bind an employee for an extended or indeterminate period. Similarly, a broad geographic scope may prevent a person from finding employment in numerous areas, thus hampering their career options far beyond what might be necessary to protect legitimate business interests. This overly broad approach fails to balance the business’s need for protection with the individual's right to work, leading courts to view it as unreasonable.

The other options indicate scenarios that typically would not lead to a finding of unreasonableness. A short time period or a specific industry limit generally indicates that the agreement remains within reasonable bounds, aligning with the intended protection of trade secrets or competitive business interests. Additionally, if both parties have agreed on the terms, this mutual consent often plays a role in the enforceability of the agreement, provided that it meets the reasonableness criteria.