Can you execute a non-compete covenant covering North America?

February 15, 2019

by a searcher from Babson College in Chicago Loop, Chicago, IL, USA

Are non-compete covenants only enforceable by geographic region in miles? Can you execute a non-compete for a business that can be run by the seller from anywhere in the country after the sale? Appreciate your response.

2 Likes

4 Replies

104 Views

Replies

Reply by an admin
from Stanford University in Honolulu, HI, USA

Hi, ^redacted‌ - Although I am an attorney, this not intended to be nor should it be considered legal advice. Here are 2 articles that may be helpful in getting you started in your thinking as far as the USA: Is Your Noncompete Agreement Enforceable? https://www.americanbar.org/groups/gpsolo/publications/gpsolo_ereport/2015/october_2015/is_noncompete_agreement_enforceable/ and The Top 10 Mistakes with Non-Competition Agreements https://www.macelree.com/the-top-10-mistakes-with-non-competition-agreements/. If I were serious about a deal, I would retain the services of an attorney who is knowledgeable in the jurisdictions where I would likely want to enforce the agreement or the employee is likely to want to run to court to prohibit me from enforcing it. Warm Regards, ~ Karen

Reply by a searcher
from Harvard University in Columbus, OH, USA

To add to that - I'm also not qualified to provide actual legal advice, but would advise you to focus on the likelihood that your seller entering into a similar business in a different geography would truly compete with you. For example, in a software business it might be reasonable to to prevent a seller from running or providing services to a company offering a similar product, but there shouldn't be a need to specifically discuss geography in this instance. But if you are buying a more local business, say a window washing company, is it really going to affect you if the seller gets into that same business on the other side of the country? Keep in mind that the seller was probably involved in this field for decades and a super broad effort to prevent them from having any involvement with the industry they know and love might come across as very scary. There are probably areas where you can find common ground that mean very little to you and a lot more to them!

+2 more replies.

Join the discussion