For South Carolina employees, part of the hiring process often includes reviewing and signing certain employment agreements, such as non-compete and non-solicit agreements. These types of post-employment restrictive covenants (meaning obligations that follow you even after you leave that employer) may be buried in an employment contract. Or they may appear in their own separate agreements, perhaps with a non-disclosure/confidentiality provision thrown in for good measure. (There’s been a push to limit or eliminate non-competes from states and the federal government, but in South Carolina, courts still enforce them if they meet the necessary requirements.)
Hopefully you have a chance to consider these types of agreements and have them reviewed by a South Carolina employment lawyer prior to signing, but not always. Many times an employee may be presented with such an agreement and have little to no to time to even read the document, let alone consider the legal implications of their signature on the page.
But for a quick overview, here are a few features to look out for.
Geographic Territory of Non-Compete and Non-Solicit Agreements
The non-compete, in order to be enforceable under South Carolina law, requires a geographic territory. This may be limited to a city, county, state, or country. Generally speaking, the more narrowly written this territory is, the more likely a South Carolina will be to enforce it.
Length of Time for Non-Compete and Non-Solicit Agreements
The non-compete cannot be for the rest of your life. It must be limited to a period of time that is reasonable. Normally one to two years will be considered reasonable. If you signed the non-compete when you sold your business, then a longer period of time may be acceptable.
Attorney’s Fees Provisions in Non-Compete and Non-Solicit Agreements
Normally, each party (employee and company) is responsible for paying their own attorney to bring or defend a lawsuit based on a non-compete or non-solicit agreement. However, if the company drafted the agreement (and that’s true nearly 100% of the time), then there’s likely a provision that says if the company has to bring a lawsuit to enforce the contract, then the employee has to pay the company for any amounts of fees that the company paid to its lawyers. Unless the employee can negotiate that provision to make such an obligation mutual, then often the employee could be on the hook for tens of thousands of dollars or more if the company wins at trial.
I’ve written in depth previously about these types of agreements, including the contents of these agreements and what I tend to look for when I’m consulting with employees. If you have further questions, you can read those articles or reach out to our office to arrange a consultation and review of your employment agreement.