This past summer, Gov. Dannel Malloy quietly vetoed Public Act No. 13-309, “An Act Concerning Employer Use of Non-Compete Agreements.” That act would have made a minor change to noncompete agreement rules in Connecticut. It failed, but continuing legislative efforts to tweak the law underscore its current weaknesses. There are, of course, two broad categories of noncompetition agreements: those arising from the sale of a business and those imposed by an employer to prevent its employees from competing after leaving that workforce. This editorial is concerned with only the second of these. Noncompetition agreements have a valid place in today’s economy, but their growing use to stifle healthy marketplace competition, their theoretical underpinnings as a strained corollary to the employment at-will rule and the disproportionate bargaining strength often used by employers to obtain them have infected these contracts with a taint of inherent unfairness and commercial impropriety. There is a need for reform—reform carried out through the process of common law evolution.
The basic tests for judging noncompetes are well known. Supporting consideration, reasonable geographic scope and temporal duration, the fairness of the protection afforded the employer, the extent of restraint on the employee’s ability to perform his trade and the public’s interest are all to be considered. In practice, however, most courts unduly restrict their focus to an agreement’s geographic scope and duration. Questions about consideration, the employer’s protected interest, the employee’s ability to work and the public’s interest are seated in the back of the jurisprudential bus.
