Non-competition

Section 8-1-190 Void Contracts; Contracts Allowed to Preserve Protectable Interests. (a) Every contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind otherwise than is provided by this section is to that extent void.

(b) Except as otherwise prohibited by law, the following contracts are allowed to preserve a protectable interest: (1) A contract between two or more persons or businesses or a person and a business limiting their ability to hire or employ the agent, servant, or employees of a party to the contract where the agent, servant, or employee holds a position uniquely essential to the management, organization, or service of the business. (2) An agreement between two or more persons or businesses or a person and a business to limit commercial dealings to each other. (3) One who sells the good will of a business may agree with the buyer to refrain from carrying on or engaging in a similar business and from soliciting customers of such business within a specified geographic area so long as the buyer, or any entity deriving title to the good will from that business, carries on a like business therein, subject to reasonable time and place restraints. Restraints of one year or less are presumed to be reasonable. (4) An agent, servant, or employee of a commercial entity may agree with such entity to refrain from carrying on or engaging in a similar business within a specified geographic area so long as the commercial entity carries on a like business therein, subject to reasonable restraints of time and place. Restraints of two years or less are presumed to be reasonable. (5) An agent, servant, or employee of a commercial entity may agree with such entity to refrain from soliciting current customers, so long as the commercial entity carries on a like business, subject to reasonable time restraints. Restraints of 18 months or for as long as post-separation consideration is paid for such agreement, whichever is greater, are presumed to be reasonable. (6) Upon or in anticipation of a dissolution of a commercial entity, partners, owners, or members, or any combination thereof, may agree that none of them will carry on a similar commercial activity in the geographic area where the commercial activity has been transacted.

(a) A protectable interest includes all of the following: (1) Trade secrets, as defined in Section 8-27-2. (2) Confidential information, including, but not limited to, pricing information and methodology; compensation; customer lists; customer data and information; mailing lists; prospective customer information; financial and investment information; management and marketing plans; business strategy, technique, and methodology; business models and data; processes and procedures; and company provided files, software, code, reports, documents, manuals, and forms used in the business that may not otherwise qualify as a trade secret but which are treated as confidential to the business entity, in whatever medium provided or preserved, such as in writing or stored electronically. (3) Commercial relationships or contacts with specific prospective or existing customers, patients, vendors, or clients. (4) Customer, patient, vendor, or client good will associated with any of the following: a. An ongoing business, franchise, commercial, or professional practice, or trade dress. b. A specific marketing or trade area. (5) Specialized and unique training involving substantial business expenditure specifically directed to a particular agent, servant, or employee; provided that such training is specifically set forth in writing as the consideration for the restraint. (b) Job skills in and of themselves, without more, are not protectable interests.

As used in this chapter, the following terms shall have the following meanings, respectively, unless the context clearly indicates otherwise: (1) TRADE SECRET. A “trade secret” is information that: a. Is used or intended for use in a trade or business; b. Is included or embodied in a formula, pattern, compilation, computer software, drawing, device, method, technique, or process; c. Is not publicly known and is not generally known in the trade or business of the person asserting that it is a trade secret; d. Cannot be readily ascertained or derived from publicly available information; e. Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy; and f. Has significant economic value.

In order to be valid, any contract or agreement executed pursuant to this article shall be reduced to writing, signed by all parties, and be supported by adequate consideration.

If a contractually specified restraint is overly broad or unreasonable in its duration, a court may void the restraint in part and reform it to preserve the protectable interest or interests. If a contractually specified restraint does not fall within the limited exceptions set out in subsection (b) of Section 8-1-190, a court may void the restraint in its entirety.

The party seeking enforcement of the covenant has the burden of proof on every element. The party resisting enforcement of the covenant has the burden of proving the existence of undue hardship, if raised as a defense.

(a) The remedies available for breach of an agreement subject to this article are: (1) Such injunctive and other equitable relief as may be appropriate with respect to any actual or threatened breach. (2) The actual damages suffered as a result of the breach or lawful liquidated damages if provided in the contract. (3) Any remedies available in contract law, including attorneys’ fees or costs, if provided for in the contract or otherwise provided for by law. (b) Nothing in this article shall limit the availability of any defense otherwise available in law or equity.

Section 8-1-196 Professional Exemptions. Nothing in this article shall be construed to eliminate any professional exemption recognized by Alabama law.

It is hereby declared that this article expresses fundamental public policies of the State of Alabama. Therefore, this article shall govern and shall be applied instead of any foreign laws that might otherwise be applicable in those instances when the application of those foreign laws would violate a fundamental public policy expressed in this article.

Section 8-1-1 Contracts Restraining Business Void; Exceptions. Repealed by Act 2015-465 effective January 1, 2016.

The components of White’s argument are as follows. First, she argues that the noncompetition agreement is a restraint on the practice of her profession of physical therapy. Second, she contends that prohibiting restraints on the practice of a profession is a fundamental public policy of the State of Alabama, citing §§ 8-1-190, 8-1-196, and 8-1-197, Ala. Code 1975, for support. 3 Third, she notes that in M/S Bremen the United States Supreme Court stated: “A contractual choice-of-forum clause should be held unenforceable if enforcement would contravene a strong public policy of the forum in which suit is brought, whether declared by statute or by judicial decision.” 407 U.S. at 15 . White thus concludes that the forum-selection clause should not be enforced because the noncompetition agreement violates a fundamental public policy in this State. The problem with this argument is that White misunderstands the statement in M/S Bremen. The Supreme Court stated that a forum-selection clause “should be held unenforceable if enforcement [of the clause] would contravene a strong public policy of the forum in which suit is brought.” Id. In other words, the Court was saying that enforcement of the forum-selection clause must contravene a state’s public policy, not that the clause should be held unenforceable if enforcement of the contract that contains the clause would contravene a state’s public policy.

White’s argument goes to the enforcement of. the contract as a whole, i.e., that enforcement of the non-competition agreement would contravene a strong public policy of the State, not to enforcement of the forum-selection clause itself. “It has long been established that forum-selection clauses are not against Alabama public policy ....” Ex parte Riverfront, LLC, 129 So.3d 1008, 1015 (Ala. 2013). Therefore, the possibility that the noncompetition agreement violates Alabama public policy does not prohibit enforcement of the forum-selection clause.

PT Solutions Holdings, LLC (“PT Solutions”), petitions this Court for a writ of mandamus seeking an order directing the Barbour Circuit Court to vacate its March 15, 2016, order denying PT Solutions’ motion to dismiss the underlying complaint filed by Laurie B. White based on an outbound forum-selection clause and to grant the motion to dismiss. We grant the petition.

White failed to clearly establish that enforcement of the forum-selection clause would be either unfair or unreasonable. PT Solutions has demonstrated a clear legal right to have the action against it dismissed on the basis that venue in the Barbour Circuit Court is, by virtue of the outbound forum-selection clause, improper. The circuit court exceeded its discretion in denying PT Solutions’ motion to dismiss. We direct the court to dismiss this cause, without prejudice, pursuant to Rule 12(b)(3), Ala. R. Civ. P. PETITION GRANTED; WRIT ISSUED. Stuart, Bolin, Main, and Bryan, JJ., concur.

The first approach is to hold that a covenant which is overbroad, and hence unconscionable, will not be enforced.

The second approach is to hold that if words in an overbroad covenant not to compete can be deleted in such a way as to render it enforceable then the court may do so. This is the so-called “blue pencil” rule.

The third approach, and the one we adopt, is to hold that if an overbroad covenant not to compete can be reasonably altered to render it enforceable, then the court shall do so unless it determines the covenant was not drafted in good faith.

The burden of proving that the covenant was drafted in good faith is on the employer.

One criticism of this position is that employers are encouraged to overreach; if the covenant they draft is overbroad then the court redrafts it for them. While we recognize that the problem of overreaching exists, we think it can be overcome by stressing the good faith element of the test. The trial court must determine whether an employer has overreached willfully and, if so, the court should refuse to alter the covenant.

Accordingly, we REMAND this case to the trial court so it can determine whether Data Management acted in good faith, and if so, whether the covenant not to compete can be reasonably altered.

This approach is consistent with U.C.C. § 2-302, as codified in Alaska under AS 45.02.302, which states: (a) If the court as a matter of law finds the contract or a clause of the contract unconscionable at the time it was made, the court may refuse to enforce the contract, enforce the remainder of the contract without the unconscionable clause, or so limit the application of an unconscionable clause as to avoid an unconscionable result. (b) If it is claimed or appears to the court that the contract or any clause of the contract may be unconscionable, the parties shall be given a reasonable opportunity to present evidence as to its commercial setting, purpose, and effect to aid the court in making the determination.

If the court as a matter of law finds the contract or a clause of the contract was unconscionable at the time it was made, the court may refuse to enforce the contract, enforce the remainder of the contract without the unconscionable clause, or so limit the application of an unconscionable clause as to avoid an unconscionable result.

We hold that the noncompetition agreement here is invalid under section 16600, and we reject the narrow-restraint exception urged by Andersen. Noncompetition agreements are invalid under section 16600 in California, even if narrowly drawn, unless they fall within the applicable statutory exceptions of section 16601, 16602, or 16602.5. In addition, we conclude that the TONC at issue in this case did not purport to release Andersen from any nonwaivable statutory claims and therefore is not unlawful under Labor Code sections 2802 and 2804. We therefore affirm in part and reverse in part the Court of Appeal judgment, and remand the matter for proceedings consistent with the views expressed above.

In context, section 16600 is best read not to render void per se all contractual restraints on business dealings, but rather to subject such restraints to a rule of reason.

(a) It shall be unlawful to include a noncompete clause in an employment contract, or to require an employee to enter a noncompete agreement, that does not satisfy an exception in this chapter. (b) (1) For current employees, and for former employees who were employed after January 1, 2022, whose contracts include a noncompete clause, or who were required to enter a noncompete agreement, that does not satisfy an exception to this chapter, the employer shall, by February 14, 2024, notify the employee that the noncompete clause or noncompete agreement is void. (2) Notice made under this subdivision shall be in the form of a written individualized communication to the employee or former employee, and shall be delivered to the last known address and the email address of the employee or former employee. (c) A violation of this section constitutes an act of unfair competition within the meaning of Chapter 5 (commencing with Section 17200).

Any person who sells the goodwill of a business, or any owner of a business entity selling or otherwise disposing of all of his or her ownership interest in the business entity, or any owner of a business entity that sells (a) all or substantially all of its operating assets together with the goodwill of the business entity, (b) all or substantially all of the operating assets of a division or a subsidiary of the business entity together with the goodwill of that division or subsidiary, or (c) all of the ownership interest of any subsidiary, may agree with the buyer to refrain from carrying on a similar business within a specified geographic area in which the business so sold, or that of the business entity, division, or subsidiary has been carried on, so long as the buyer, or any person deriving title to the goodwill or ownership interest from the buyer, carries on a like business therein. For the purposes of this section, “business entity” means any partnership (including a limited partnership or a limited liability partnership), limited liability company (including a series of a limited liability company formed under the laws of a jurisdiction that recognizes such a series), or corporation. For the purposes of this section, “owner of a business entity” means any partner, in the case of a business entity that is a partnership (including a limited partnership or a limited liability partnership), or any member, in the case of a business entity that is a limited liability company (including a series of a limited liability company formed under the laws of a jurisdiction that recognizes such a series), or any owner of capital stock, in the case of a business entity that is a corporation. For the purposes of this section, “ownership interest” means a partnership interest, in the case of a business entity that is a partnership (including a limited partnership a limited liability partnership), a membership interest, in the case of a business entity that is a limited liability company (including a series of a limited liability company formed under the laws of a jurisdiction that recognizes such a series), or a capital stockholder, in the case of a business entity that is a corporation. For the purposes of this section, “subsidiary” means any business entity over which the selling business entity has voting control or from which the selling business entity has a right to receive a majority share of distributions upon dissolution or other liquidation of the business entity (or has both voting control and a right to receive these distributions.)

(a) Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void. (b) (1) This section shall be read broadly, in accordance with Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937, to void the application of any noncompete agreement in an employment context, or any noncompete clause in an employment contract, no matter how narrowly tailored, that does not satisfy an exception in this chapter. (2) This subdivision does not constitute a change in, but is declaratory of, existing law. (c) This section shall not be limited to contracts where the person being restrained from engaging in a lawful profession, trade, or business is a party to the contract.

(a) Any contract that is void under this chapter is unenforceable regardless of where and when the contract was signed. (b) An employer or former employer shall not attempt to enforce a contract that is void under this chapter regardless of whether the contract was signed and the employment was maintained outside of California. (c) An employer shall not enter into a contract with an employee or prospective employee that includes a provision that is void under this chapter. (d) An employer that enters into a contract that is void under this chapter or attempts to enforce a contract that is void under this chapter commits a civil violation. (e) (1) An employee, former employee, or prospective employee may bring a private action to enforce this chapter for injunctive relief or the recovery of actual damages, or both. (2) In addition to the remedies described in paragraph (1), a prevailing employee, former employee, or prospective employee in an action based on a violation of this chapter shall be entitled to recover reasonable attorney’s fees and costs.

(a) Any partner may, upon or in anticipation of any of the circumstances described in subdivision (b), agree that he or she will not carry on a similar business within a specified geographic area where the partnership business has been transacted, so long as any other member of the partnership, or any person deriving title to the business or its goodwill from any such other member of the partnership, carries on a like business therein. (b) Subdivision (a) applies to either of the following circumstances: (1) A dissolution of the partnership. (2) Dissociation of the partner from the partnership.

Any member may, upon or in anticipation of a dissolution of, or the termination of his or her interest in, a limited liability company (including a series of a limited liability company formed under the laws of a jurisdiction recognizing such a series), agree that he or she or it will not carry on a similar business within a specified geographic area where the limited liability company business has been transacted, so long as any other member of the limited liability company, or any person deriving title to the business or its goodwill from any such other member of the limited liability company, carries on a like business therein.

Contrary to Andersen’s belief, however, California courts have not embraced the Ninth Circuit’s narrow-restraint exception.

We also hold that a rule of reason applies to determine the validity of a contractual provision by which a business is restrained from engaging in a lawful trade or business with 40 IXCHEL PHARMA, LLC v. BIOGEN, INC. Opinion of the Court by Liu, J. another business. Section 2.13 of the Biogen-Forward Agreement is such a restraint because it prevents Forward from collaborating with Ixchel or any other partner in the development of treatments containing the active ingredient DMF. Its validity under section 16600 must therefore be evaluated based on a rule of reason. We express no view on the validity of the agreement at issue.

(a) Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void. (b) (1) This section shall be read broadly, in accordance with Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937, to void the application of any noncompete agreement in an employment context, or any noncompete clause in an employment contract, no matter how narrowly tailored, that does not satisfy an exception in this chapter. (2) This subdivision does not constitute a change in, but is declaratory of, existing law.

(a) Any contract that is void under this chapter is unenforceable regardless of where and when the contract was signed. (b) An employer or former employer shall not attempt to enforce a contract that is void under this chapter regardless of whether the contract was signed and the employment was maintained outside of California.

Any person who sells the goodwill of a business, or any owner of a business entity selling or otherwise disposing of all of his or her ownership interest in the business entity, or any owner of a business entity that sells (a) all or substantially all of its operating assets together with the goodwill of the business entity, (b) all or substantially all of the operating assets of a division or a subsidiary of the business entity together with the goodwill of that division or subsidiary, or (c) all of the ownership interest of any subsidiary, may agree with the buyer to refrain from carrying on a similar business within a specified geographic area in which the business so sold, or that of the business entity, division, or subsidiary has been carried on, so long as the buyer, or any person deriving title to the goodwill or ownership interest from the buyer, carries on a like business therein. For the purposes of this section, “business entity” means any partnership (including a limited partnership or a limited liability partnership), limited liability company (including a series of a limited liability company formed under the laws of a jurisdiction that recognizes such a series), or corporation. For the purposes of this section, “owner of a business entity” means any partner, in the case of a business entity that is a partnership (including a limited partnership or a limited liability partnership), or any member, in the case of a business entity that is a limited liability company (including a series of a limited liability company formed under the laws of a jurisdiction that recognizes such a series), or any owner of capital stock, in the case of a business entity that is a corporation. For the purposes of this section, “ownership interest” means a partnership interest, in the case of a business entity that is a partnership (including a limited partnership a limited liability partnership), a membership interest, in the case of a business entity that is a limited liability company (including a series of a limited liability company formed under the laws of a jurisdiction that recognizes such a series), or a capital stockholder, in the case of a business entity that is a corporation. For the purposes of this section, “subsidiary” means any business entity over which the selling business entity has voting control or from which the selling business entity has a right to receive a majority share of distributions upon dissolution or other liquidation of the business entity (or has both voting control and a right to receive these distributions.)

(a) Any partner may, upon or in anticipation of any of the circumstances described in subdivision (b), agree that he or she will not carry on a similar business within a specified geographic area where the partnership business has been transacted, so long as any other member of the partnership, or any person deriving title to the business or its goodwill from any such other member of the partnership, carries on a like business therein. (b) Subdivision (a) applies to either of the following circumstances: (1) A dissolution of the partnership. (2) Dissociation of the partner from the partnership.

Any member may, upon or in anticipation of a dissolution of, or the termination of his or her interest in, a limited liability company (including a series of a limited liability company formed under the laws of a jurisdiction recognizing such a series), agree that he or she or it will not carry on a similar business within a specified geographic area where the limited liability company business has been transacted, so long as any other member of the limited liability company, or any person deriving title to the business or its goodwill from any such other member of the limited liability company, carries on a like business therein.

(a) It shall be unlawful to include a noncompete clause in an employment contract, or to require an employee to enter a noncompete agreement, that does not satisfy an exception in this chapter. (b) (1) For current employees, and for former employees who were employed after January 1, 2022, whose contracts include a noncompete clause, or who were required to enter a noncompete agreement, that does not satisfy an exception to this chapter, the employer shall, by February 14, 2024, notify the employee that the noncompete clause or noncompete agreement is void. (2) Notice made under this subdivision shall be in the form of a written individualized communication to the employee or former employee, and shall be delivered to the last known address and the email address of the employee or former employee. (c) A violation of this section constitutes an act of unfair competition within the meaning of Chapter 5 (commencing with Section 17200).

(c) An employer shall not enter into a contract with an employee or prospective employee that includes a provision that is void under this chapter. (d) An employer that enters into a contract that is void under this chapter or attempts to enforce a contract that is void under this chapter commits a civil violation. (e) (1) An employee, former employee, or prospective employee may bring a private action to enforce this chapter for injunctive relief or the recovery of actual damages, or both. (2) In addition to the remedies described in paragraph (1), a prevailing employee, former employee, or prospective employee in an action based on a violation of this chapter shall be entitled to recover reasonable attorney’s fees and costs.

(c) This section shall not be limited to contracts where the person being restrained from engaging in a lawful profession, trade, or business is a party to the contract.

(a) For purposes of this section, the following definitions apply: (1) “Contract” includes a promise, undertaking, contract, or agreement, whether written or oral, express or implied. (2) “Debt” means money, personal property, or their equivalent that is due or owing or alleged to be due or owing from a natural person to another person, including, but not limited to, for employment-related costs, education-related costs, or a consumer financial product or service, regardless of whether the debt is certain, contingent, or incurred voluntarily. (3) “Debt collector” has the same meaning as defined in subdivision (c) of Section 1788.2 of the Civil Code. (4) “Employer” means any person or entity that employs workers. “Employer” includes any parent company, subsidiary, division, affiliate, contractor, hiring party, or third-party agent of an employer. (5) “Freelance worker” has the same meaning as defined in subdivision (a) of Section 18101. (6) “Misconduct” has the same meaning as in Section 1256 of the Unemployment Insurance Code. (7) “Penalty, fee, or cost” includes, but is not limited to, a replacement hire fee, retraining fee, replacement fee, quit fee, reimbursement for immigration or visa-related costs, liquidated damages, lost goodwill, and lost profit.

(b) (1) Except as provided in paragraph (2), for contracts entered into on or after January 1, 2026, it shall be unlawful to include in any employment contract, or to require a worker to execute as a condition of employment or a work relationship a contract that includes, a contract term that does any of the following: (A) Requires the worker to pay an employer, training provider, or debt collector for a debt if the worker’s employment or work relationship with a specific employer terminates. (B) Authorizes the employer, training provider, or debt collector to resume or initiate collection of or end forbearance on a debt if the worker’s employment or work relationship with a specific employer terminates. (C) Imposes any penalty, fee, or cost on a worker if the worker’s employment or work relationship with a specific employer terminates.

(2) This section does not apply to any of the following: (A) A contract entered into under any loan repayment assistance program or loan forgiveness program provided by a federal, state, or local governmental agency. (B) A contract related to the repayment of the cost of tuition for a transferable credential that meets all of the following requirements: (i) The contract is offered separately from any contract for employment. (ii) The contract does not require obtaining the transferable credential as a condition of employment. (iii) The contract specifies the repayment amount before the worker agrees to the contract, and the repayment amount does not exceed the cost to the employer of the transferable credential received by the worker. (iv) The contract provides for a prorated repayment amount during any required employment period that is proportional to the total repayment amount and the length of the required employment period and does not require an accelerated payment schedule if the worker separates from the employment. (v) The contract does not require repayment to the employer by the worker if the worker is terminated, except if the worker is terminated for misconduct. (C) A contract related to enrollment in an apprenticeship program approved by the Division of Apprenticeship Standards. (D) A contract for the receipt of a discretionary or unearned monetary payment, including a financial bonus, at the outset of employment that is not tied to specific job performance, provided that all of the following conditions are met: (i) The terms of any repayment obligation are set forth in a separate agreement from the primary employment contract. (ii) The employee is notified that they have the right to consult an attorney regarding the agreement and provided with a reasonable time period of not less than five business days to obtain advice of counsel prior to executing the agreement. (iii) Any repayment obligation for early separation from employment is not subject to interest accrual and is prorated based on the remaining term of any retention period, which shall not exceed two years from the receipt of payment. (iv) The worker has an option to defer receipt of the payment to the end of a fully served retention period without any repayment obligation. (v) Separation from employment prior to the retention period was at the sole election of the employee, or at the election of the employer for misconduct. (E) A contract related to the lease, financing, or purchase of residential property, including, but not limited to, a contract pursuant to the California Residential Mortgage Lending Act (Division 20 (commencing with Section 50000) of the Financial Code).

(c) A contract that is unlawful under subdivision (b) is a contract restraining a person from engaging in a lawful profession, trade, or business, and is void under Section 16600 only if the contract was entered into on or after January 1, 2026.

The five factors to be considered in evaluating the reasonableness of a restrictive covenant ancillary to an employment agreement are: (1) the length of time the restriction operates; (2) the geographical area covered; (3) the fairness of the protection accorded to the employer; (4) the extent of the restraint on the employee’s opportunity to pursue his occupation; and (5) the extent of interference with the public’s interests. Scott v. General Iron & Welding Co., 171 Conn. 132, 137 , 368 A.2d 111 (1976); New Haven Tobacco Co. v. Perrelli, 11 Conn. App. 636, 638-39 , 528 A.2d 865 (1987).

The trial court’s conclusion that this restrictive covenant was reasonable is consistent with other cases where we have held that time and geographic restrictions in a covenant not to compete are valid if they are reasonably limited and fairly protect the interests of both parties. See Scott v. General Iron & Welding Co., supra, 138, 140 (upholding five year statewide covenant barring employee from working as manager in *531 competing business)

A covenant not to compete is valid and enforceable only if it is: (A) Necessary to protect a legitimate business interest; (B) reasonably limited in time, geographic scope and practice restrictions as necessary to protect such business interest; and (C) otherwise consistent with the law and public policy. The party seeking to enforce a covenant not to compete shall have the burden of proof in any proceeding.

A covenant not to compete that is entered into, amended, extended or renewed on or after July 1, 2016, shall not: (A) Restrict the physician's competitive activities (i) for a period of more than one year, and (ii) in a geographic region of more than fifteen miles from the primary site where such physician practices; or (B) be enforceable against a physician if (i) such employment contract or agreement was not made in anticipation of, or as part of, a partnership or ownership agreement and such contract or agreement expires and is not renewed, unless, prior to such expiration, the employer makes a bona fide offer to renew the contract on the same or similar terms and conditions, or (ii) the employment or contractual relationship is terminated by the employer, unless such employment or contractual relationship is terminated for cause.

A covenant not to compete that is entered into, amended, extended or renewed on or after October 1, 2023, shall not: (A) Restrict the physician assistant's competitive activities (i) for a period of more than one year, and (ii) in a geographic region of more than fifteen miles from the primary site where such physician assistant practices; or (B) be enforceable against a physician assistant if (i) such employment contract or agreement was not made in anticipation of, or as part of, a partnership or ownership agreement and such contract or agreement expires and is not renewed, unless, prior to such expiration, the employer makes a bona fide offer to renew the contract on the same or similar terms and conditions, or (ii) the employment or contractual relationship is terminated by the employer, unless such employment or contractual relationship is terminated for cause.

A covenant not to compete that is entered into, amended, extended or renewed on or after October 1, 2023, shall not: (A) Restrict the advanced practice registered nurse's competitive activities (i) for a period of more than one year, and (ii) in a geographic region of more than fifteen miles from the primary site where such advanced practice registered nurse practices; or (B) be enforceable against an advanced practice registered nurse if (i) such employment contract or agreement was not made in anticipation of, or as part of, a partnership or ownership agreement and such contract or agreement expires and is not renewed, unless, prior to such expiration, the employer makes a bona fide offer to renew the contract on the same or similar terms and conditions, or (ii) the employment or contractual relationship is terminated by the employer, unless such employment or contractual relationship is terminated for cause.

No broadcast industry employer employment contract for the services of a broadcast employee may contain a provision requiring that such broadcast employee: (1) Refrain from obtaining employment in a specified geographical area for a specified period of time after termination of employment with that broadcast industry employer; (2) Disclose the terms or conditions of an offer of employment, or the existence of any such offer, from any other broadcast industry employer following the expiration of the term of the employment contract; or (3) Agree to enter into a subsequent employment contract with the broadcast industry employer, or extend or renew the existing employment contract, upon the same terms and conditions offered by a prospective employer.

No employer may require any person employed in the classification 339032 of the standard occupational classification system of the Bureau of Labor Statistics of the United States Department of Labor to enter into an agreement prohibiting such person from engaging in the same or a similar job, at the same location at which the employer employs such person, for another employer or as a self-employed person, unless the employer proves that such person has obtained trade secrets, as defined in subsection (d) of section 35-51 , of the employer.

As used in sections 20-670 to 20-682 , inclusive: (1) “Certificate” means a certificate of registration issued under section 20-672 . (2) “Commissioner” means the Commissioner of Consumer Protection or any person designated by the commissioner to administer and enforce the provisions of sections 20-670 to 20-682 , inclusive. (3) “Companion services” means nonmedical, basic supervision services to ensure the safety and well-being of a person in the person's home. (4) “Covenant not to compete” means any agreement or contract that restricts the right of an individual to provide companion services, home health services or homemaker services (A) in any geographic area of the state for any period of time, or (B) to a specific individual.

Sec. 20-681. Covenants not to compete, homemaker, companion, home health services. Prohibition established. Any covenant not to compete is against public policy and shall be void and unenforceable.

A covenant not to compete that is entered into, amended, extended or renewed on or after October 1, 2023, shall not be enforceable if (A) the physician who is a party to the employment or other contract or agreement does not agree to a proposed material change to the compensation terms of such contract or agreement prior to or at the time of the extension or renewal of such contract or agreement, and (B) the contract or agreement expires and is not renewed by the employer or the employment or contractual relationship is terminated by the employer, unless such employment or contractual relationship is terminated by the employer for cause. The provisions of this subdivision shall not apply to a covenant not to compete that is entered into between a physician and a group practice, as defined in section 19a-486i , of not more than thirty-five physicians the majority ownership of which is comprised of physicians.

Each covenant not to compete entered into, amended or renewed on and after July 1, 2016, shall be separately and individually signed by the physician.

The remaining provisions of any contract or agreement that includes a covenant not to compete that is rendered void and unenforceable, in whole or in part, under the provisions of this section shall remain in full force and effect, including provisions that require the payment of damages resulting from any injury suffered by reason of termination of such contract or agreement.

(a) As used in this section: (1) “Associated broadcast entities” means entities that provide reporting services to broadcast television or radio stations, including without limitation, subcontractors that provide weather, sports, traffic and other reports for broadcast or cablecast; (2) “Broadcast employee” means any employee of a broadcast industry employer, except those employees whose services primarily include sales or management functions; (3) “Broadcast industry employer” means the owner or operator of one or more broadcast television or radio stations, including any associated broadcast entity, but excluding cable stations or cable networks;

The provisions of this section shall apply to employment contracts entered into, renewed or extended on or after July 1, 2007.

The provisions of this section shall apply to agreements entered into, renewed or extended on or after October 1, 2007.

A covenant not to compete that is entered into, amended, extended or renewed on or after October 1, 2023, shall be valid and enforceable only if it is: (A) Necessary to protect a legitimate business interest; (B) reasonably limited in time, geographic scope and practice restrictions as necessary to protect such business interest; and (C) otherwise consistent with the law and public policy. The party seeking to enforce a covenant not to compete shall have the burden of proof in any proceeding.

(3) A covenant not to compete that is entered into, amended, extended or renewed on or after October 1, 2023, shall not be enforceable if (A) the physician assistant who is a party to the employment or other contract or agreement does not agree to a proposed material change to the compensation terms of such contract or agreement prior to or at the time of the extension or renewal of such contract or agreement; and (B) the contract or agreement expires and is not renewed by the employer or the employment or contractual relationship is terminated by the employer, unless such employment or contractual relationship is terminated for cause.

(c) The remaining provisions of any contract or agreement that includes a covenant not to compete that is rendered void and unenforceable, in whole or in part, under the provisions of this section shall remain in full force and effect, including provisions that require the payment of damages resulting from any injury suffered by reason of termination of such contract or agreement.

A covenant not to compete that is entered into, amended, extended or renewed on or after October 1, 2023, shall be valid and enforceable only if it is: (A) Necessary to protect a legitimate business interest; (B) reasonably limited in time, geographic scope and practice restrictions as necessary to protect such business interest; and (C) otherwise consistent with the law and public policy. The party seeking to enforce a covenant not to compete shall have the burden of proof in any proceeding.

(3) A covenant not to compete that is entered into, amended, extended or renewed on or after October 1, 2023, shall not be enforceable if (A) the advanced practice registered nurse who is a party to the employment or other contract or agreement does not agree to a proposed material change to the compensation terms of such contract or agreement prior to or at the time of the extension or renewal of such contract or agreement; and (B) the contract or agreement expires and is not renewed by the employer or the employment or contractual relationship is terminated by the employer, unless such employment or contractual relationship is terminated for cause.

(c) The remaining provisions of any contract or agreement that includes a covenant not to compete that is rendered void and unenforceable, in whole or in part, under the provisions of this section shall remain in full force and effect, including provisions that require the payment of damages resulting from any injury suffered by reason of termination of such contract or agreement.

To determine whether the restrictive covenant is enforceable, we look at the entirety of the agreement in light of Norman’s position within the company.

The contract-formation analysis of consideration turns on whether some consideration was exchanged at the time of contracting, not whether that consideration was “adequate” to support the accompanying restriction.

That is not to suggest that the adequacy of consideration is irrelevant in the context of restrictive covenants; the balancing-of-the-equities inquiry affords the court discretion to weigh the breadth of a restrictive covenant against the consideration that supports it.

Delaware courts review noncompete and nonsolicit agreements subject to Delaware law to ensure that they are (i) reasonable in geographic scope and temporal duration, (ii) advance legitimate economic interests of the party seeking enforcement, and (iii) survive a balancing of the equities.

Neither side disputes that Delaware courts have the discretionary power to blue pencil overbroad restrictive covenants to align a company’s legitimate interests and an individual’s right to be free from unreasonable restrictions on their livelihood. On several occasions, the Court of Chancery has utilized blue penciling to narrow the geographic scope and temporal duration of restrictive covenants to make them reasonable and enforceable.112 Delaware courts have exercised their discretion to blue pencil restrictive covenants under circumstances that indicate an equality of bargaining power between the parties, such as where the language of the covenants was specifically negotiated, valuable consideration was exchanged for the restriction, or in the context of the sale of a business.

On the other hand, Delaware courts have declined to blue pencil when the circumstances and equities do not support that relief. In Intertek Testing Services NA, Inc. v. Eastman, the court refused to blue pencil a non-compete clause in a sale- of-business agreement after finding that doing so would inequitably rescue a sophisticated party from its own unenforceable contract.126 Similarly, in Kodiak Building Partners, LLC v. Adams, the Court of Chancery declined to blue pencil overbroad restrictive covenants despite the presence of a judicial reformation clause within the agreement, reasoning that “[t]he inequities inherent in blue-penciling a noncompete also counsel against enforcing only those portions.”127 Given the factual record in this case—which is undisputed on appeal—the Court of Chancery was well within its discretion to apply that precedent and refuse to blue pencil the Covenants.

Whether a court should blue pencil a covenant cannot turn on the egregiousness of the employee’s conduct. Rather, the court’s decision to exercise that equitable power should be based on the covenants themselves and the circumstances surrounding their adoption, as the Court of Chancery did here. This is not to say that Delaware courts should never blue pencil an agreement that is overbroad in some respects. But the relief Appellant sought was a wholesale reformation of the parties’ agreement. It would require the court to craft an entirely new covenant to which neither side agreed. That is, the Court of Chancery could not 32 simply constrain the Covenants’ temporal or geographic scope. The court also would have had to rewrite the persons to whom the Covenants applied and the type of conduct they restricted, which would extend well beyond what Delaware precedent has historically allowed.

To sum up, we disagree with the Court of Chancery’s conclusion that forfeiture-for-competition provisions like the one at issue here are restraints of trade subject to review for reasonableness. When sophisticated parties agree in a limited partnership agreement that a partner, who voluntarily withdraws from, and then competes with, the partnership, will forfeit contingent post-withdrawal financial benefits, public-policy considerations weigh in favor of enforcing that agreement.

When sophisticated actors avail themselves of the contractual flexibility embodied in the Delaware Revised Uniform Limited Partnership Act—a statute that is expressly designed “to give maximum effect to the principle of freedom of contract and to the enforceability of partnership agreements”4—and agree that a departing partner will forfeit a specified benefit should he engage in competition with the partnership, our courts should, absent unconscionability, bad faith, or other extraordinary circumstances, hold them to their agreements.

We answer the first certified question as follows: Cantor Fitzgerald is not restricted to the limited partnership context.

The fact that the LKQ RSU Agreements require the return of benefits already received does not alter our analysis.

Any covenant not to compete provision of an employment, partnership or corporate agreement between and/or among physicians which restricts the right of a physician to practice medicine in a particular locale and/or for a defined period of time, upon the termination of the principal agreement of which the said provision is a part, shall be void; except that all other provisions of such an agreement shall be enforceable at law, including provisions which require the payment of damages in an amount that is reasonably related to the injury suffered by reason of termination of the principal agreement. Provisions which require the payment of damages upon termination of the principal agreement may include, but not be limited to, damages related to competition.

IV. CONCLUSION For the foregoing reasons, we affirm the Court of Chancery’s decision denying Sunder’s preliminary injunction motion. We reverse only the portion of the court’s ruling that determined as a matter of law that the LLC Agreement was not enforceable.

(1) Notwithstanding s. 542.18 and subsection (2), enforcement of contracts that restrict or prohibit competition during or after the term of restrictive covenants, so long as such contracts are reasonable in time, area, and line of business, is not prohibited. In any action concerning enforcement of a restrictive covenant:(a) A court shall not enforce a restrictive covenant unless it is set forth in a writing signed by the person against whom enforcement is sought. (b) The person seeking enforcement of a restrictive covenant shall plead and prove the existence of one or more legitimate business interests justifying the restrictive covenant. The term “legitimate business interest” includes, but is not limited to:1. Trade secrets, as defined in s. 688.002(4). 2. Valuable confidential business or professional information that otherwise does not qualify as trade secrets. 3. Substantial relationships with specific prospective or existing customers, patients, or clients. 4. Customer, patient, or client goodwill associated with:a. An ongoing business or professional practice, by way of trade name, trademark, service mark, or “trade dress”; b. A specific geographic location; or c. A specific marketing or trade area. 5. Extraordinary or specialized training. Any restrictive covenant not supported by a legitimate business interest is unlawful and is void and unenforceable.

(c) A person seeking enforcement of a restrictive covenant also shall plead and prove that the contractually specified restraint is reasonably necessary to protect the legitimate business interest or interests justifying the restriction. If a person seeking enforcement of the restrictive covenant establishes prima facie that the restraint is reasonably necessary, the person opposing enforcement has the burden of establishing that the contractually specified restraint is overbroad, overlong, or otherwise not reasonably necessary to protect the established legitimate business interest or interests. If a contractually specified restraint is overbroad, overlong, or otherwise not reasonably necessary to protect the legitimate business interest or interests, a court shall modify the restraint and grant only the relief reasonably necessary to protect such interest or interests.

(d) In determining the reasonableness in time of a postterm restrictive covenant not predicated upon the protection of trade secrets, a court shall apply the following rebuttable presumptions:1. In the case of a restrictive covenant sought to be enforced against a former employee, agent, or independent contractor, and not associated with the sale of all or a part of:a. The assets of a business or professional practice, or b. The shares of a corporation, or c. A partnership interest, or d. A limited liability company membership, or e. An equity interest, of any other type, in a business or professional practice, a court shall presume reasonable in time any restraint 6 months or less in duration and shall presume unreasonable in time any restraint more than 2 years in duration.

2. In the case of a restrictive covenant sought to be enforced against a former distributor, dealer, franchisee, or licensee of a trademark or service mark and not associated with the sale of all or a part of:a. The assets of a business or professional practice, or b. The shares of a corporation, or c. A partnership interest, or d. A limited liability company membership, or e. An equity interest, of any other type, in a business or professional practice, a court shall presume reasonable in time any restraint 1 year or less in duration and shall presume unreasonable in time any restraint more than 3 years in duration. 3. In the case of a restrictive covenant sought to be enforced against the seller of all or a part of:a. The assets of a business or professional practice, or b. The shares of a corporation, or c. A partnership interest, or d. A limited liability company membership, or e. An equity interest, of any other type, in a business or professional practice, a court shall presume reasonable in time any restraint 3 years or less in duration and shall presume unreasonable in time any restraint more than 7 years in duration.

(e) In determining the reasonableness in time of a postterm restrictive covenant predicated upon the protection of trade secrets, a court shall presume reasonable in time any restraint of 5 years or less and shall presume unreasonable in time any restraint of more than 10 years. All such presumptions shall be rebuttable presumptions.

(g) In determining the enforceability of a restrictive covenant, a court:1. Shall not consider any individualized economic or other hardship that might be caused to the person against whom enforcement is sought. 2. May consider as a defense the fact that the person seeking enforcement no longer continues in business in the area or line of business that is the subject of the action to enforce the restrictive covenant only if such discontinuance of business is not the result of a violation of the restriction. 3. Shall consider all other pertinent legal and equitable defenses. 4. Shall consider the effect of enforcement upon the public health, safety, and welfare.

(h) A court shall construe a restrictive covenant in favor of providing reasonable protection to all legitimate business interests established by the person seeking enforcement. A court shall not employ any rule of contract construction that requires the court to construe a restrictive covenant narrowly, against the restraint, or against the drafter of the contract.

(i) No court may refuse enforcement of an otherwise enforceable restrictive covenant on the ground that the contract violates public policy unless such public policy is articulated specifically by the court and the court finds that the specified public policy requirements substantially outweigh the need to protect the legitimate business interest or interests established by the person seeking enforcement of the restraint.

(j) A court shall enforce a restrictive covenant by any appropriate and effective remedy, including, but not limited to, temporary and permanent injunctions. The violation of an enforceable restrictive covenant creates a presumption of irreparable injury to the person seeking enforcement of a restrictive covenant. No temporary injunction shall be entered unless the person seeking enforcement of a restrictive covenant gives a proper bond, and the court shall not enforce any contractual provision waiving the requirement of an injunction bond or limiting the amount of such bond.

(2) Nothing in this section shall be construed or interpreted to legalize or make enforceable any restraint of trade or commerce otherwise illegal or unenforceable under the laws of the United States or of this state. (3) This act shall apply prospectively, and it shall not apply in actions determining the enforceability of restrictive covenants entered into before July 1, 1996.

The issue presented is whether home health service referral sources can be a protected legitimate business interest under section 542.335, Florida Statutes (2016).1 For the reasons that follow, we approve the decision in White, quash the decision in Hiles, and hold that home health service referral sources can be a protected legitimate business interest under the statute.

For the foregoing reasons, we conclude that section 542.335(1)(b)3. does not preclude recognizing referral sources as protected legitimate business interests.

For instance, an interest in referral sources for specialist physicians may be a legitimate business interest, thus capable of protection in some circumstances and unprotected in others.4 Therefore, we approve the decision in White, in which the Fourth District relied on the reasoning of its earlier decision in Infinity Home.

Accordingly, we hold that section 542.335, Florida Statutes, is non- exhaustive and does not preclude the protection of referral sources; hence, home health service referrals may be a protected legitimate business interests depending on the context and proof adduced. As a result, we approve the decision in White and quash the decision in Hiles. Finally, we remand to the district court with instructions to further remand to the appropriate trial court for any necessary further proceedings consistent with this opinion. It is so ordered. LABARGA, C.J., and PARIENTE, QUINCE, CANADY, POLSTON, and LAWSON, JJ., concur.

(1) “Annual mean wage of employees in Florida” or “annual mean wage” means the most recent annual mean wage as calculated by the United States Department of Labor, Bureau of Labor Statistics, or its successor calculation, for all occupations in this state.

(3) “Covered employee” means an employee or individual contractor who earns or is reasonably expected to earn a salary greater than twice the annual mean wage of the county in this state in which the covered employer has its principal place of business, or the county in this state in which the employee resides if the covered employer’s principal place of business is not in this state. The term does not include a person classified as a health care practitioner as defined in s. 456.001.

(10) “Salary” means the base compensation, calculated on an annualized basis, which a covered employer pays a covered employee, including a base wage, a salary, a professional fee, or other compensation for personal services, and the fair market value of any benefit other than cash. Salary does not include health care benefits, severance pay, retirement benefits, expense reimbursement, distribution of earnings and profits not included as compensation for personal services, discretionary incentives or awards, or anticipated but indeterminable compensation, including tips, bonuses, or commissions.

(5) “Covered garden leave agreement” means a written agreement, or part of a written agreement, between a covered employee and covered employer in which:(a) The covered employee and covered employer agree to up to, but no more than, 4 years of advance, express notice before terminating the employment or contractor relationship; (b) The covered employee agrees not to resign before the end of such notice period; and (c) The covered employer agrees to retain the covered employee for the duration of such notice period and to continue paying the covered employee the same salary and providing the same benefits that the covered employee received from the covered employer in the last month before the commencement of the notice period.

(6) “Covered noncompete agreement” means a written agreement, or a portion of a written agreement, between a covered employee and a covered employer in which, for a period not to exceed 4 years and within the geographic area defined in the agreement, the covered employee agrees not to assume a role with or for another business, entity, or individual:(a) In which the covered employee would provide services similar to the services provided to the covered employer during the 3 years preceding the noncompete period; or (b) In which it is reasonably likely the covered employee would use the confidential information or customer relationships of the covered employer.

(1) APPLICABILITY.—This section applies to:(a) A covered noncompete agreement with a covered employee who maintains a primary place of work in this state, regardless of any applicable choice of law provisions; or (b) A covered noncompete agreement with a covered employer whose principal place of business is in this state and which agreement is expressly governed by the laws of this state. In either case, if any provision of this section is in conflict with any other law, the provisions of this section govern.

(2) RESTRAINT OF TRADE.—A covered noncompete agreement does not violate public policy as a restraint of trade, as described in s. 542.18, or an attempt to monopolize trade or commerce in this state, as described in s. 542.19, and is fully enforceable according to its terms, provided that:(a) A covered employee was advised, in writing, of the right to seek counsel before execution of the covered noncompete agreement and was provided notice as described in subsection (3); (b) A covered employee acknowledges, in writing, that in the course of his or her employment, the covered employee will receive confidential information or customer relationships; and (c) A covered noncompete agreement provides that the noncompete period is reduced day-for-day by any nonworking portion of the notice period, pursuant to a covered garden leave agreement between the covered employee and the covered employer, if applicable. (3) NOTICE.—A covered employer must provide a proposed covered noncompete agreement to:(a) A prospective covered employee at least 7 days before an offer of employment expires; or (b) A current covered employee at least 7 days before the date that an offer to enter into a covered noncompete agreement expires. (4) OTHER AGREEMENTS.—This section does not affect or limit the enforceability of any other employment agreement or any other agreement.

(5) BREACH OF COVERED NONCOMPETE AGREEMENT; REMEDIES.—(a) Upon application by a covered employer seeking enforcement of a covered noncompete agreement, a court must preliminarily enjoin a covered employee from providing services to any business, entity, or individual other than the covered employer during the noncompete period. The court may modify or dissolve the injunction only if the covered employee establishes by clear and convincing evidence, based on nonconfidential information, that:1. The covered employee will not perform, during the noncompete period, any work similar to the services provided to the covered employer during the 3-year period preceding the commencement of the noncompete period, or use confidential information or customer relationships of the covered employer; 2. The covered employer has failed to pay or provide the consideration provided for in the covered noncompete agreement and has had a reasonable opportunity to cure the failure; or 3. The business, entity, or individual seeking to employ or engage the covered employee is not engaged in, and is not planning or preparing to engage in during the noncompete period, business activity similar to that engaged in by the covered employer in the geographic area specified in the noncompete agreement.

(b) Upon application by a covered employer seeking enforcement of a covered noncompete agreement, a court must preliminarily enjoin a business, an entity, or an individual from engaging a covered employee during the covered employee’s noncompete period. The court may modify or dissolve the injunction only if the business, entity, or individual establishes by clear and convincing evidence, based on nonconfidential information, that:1. The covered employee will not provide any services similar to the services provided to the covered employer during the 3-year period preceding the commencement of the noncompete period, or use confidential information or customer relationships of the covered employer; or 2. The business or individual seeking to employ or engage the covered employee is not engaged in, and is not planning or preparing to engage in during the noncompete period, business activity similar to that engaged in by the covered employer in the geographic area specified in the noncompete agreement.

Any information filed with the court which the covered employer deems to be confidential must be filed under seal to protect confidentiality or avoid substantial injury. A court must presume that an employee or individual contractor has access to confidential information or customer relationships if the employee or individual contractor acknowledges the access or receipt of such access in writing.

(c) The injunctive relief provided in this section is not an exclusive remedy, and a prevailing covered employer is entitled to recover all available monetary damages for all available claims. (d) In any action to enforce this section, the prevailing party is entitled to reasonable attorney fees and costs. (e) If the covered employee engages in gross misconduct against the covered employer, the covered employer may reduce the salary or benefits of the covered employee or take other appropriate action during the noncompete period, which reduction or other action may not be considered a breach of the covered noncompete agreement. Any action regarding a restrictive covenant that does not meet the definition of a covered garden leave agreement or a covered noncompete agreement as provided in this part is governed by s. 542.335.

542.41 Short title.—This part may be cited as the “Florida Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (CHOICE) Act.”

A key employee or key independent contractor may enter into a written agreement or covenant that protects the employer’s legitimate business interests and prohibits the key employee or key independent contractor from engaging in employment or a line of business that is in direct competition with the employer’s business after termination of employment, and the same shall be enforceable, if the agreement or covenant is reasonable as to its duration, geographical area, type of employment or line of business, and does not impose a greater restraint than is reasonably necessary to protect the employer’s legitimate business interests.

Under no circumstances shall a provision of such agreement or covenant, as set forth herein, establish a postemployment restriction of direct competition that exceeds a period of eighteen (18) months from the time of the key employee’s or key independent contractor’s termination unless consideration, in addition to employment or continued employment, is given to a key employee or key independent contractor. Nothing in this chapter shall be construed to limit a party’s ability to otherwise protect trade secrets or other information deemed proprietary or confidential.

(2) It shall be a rebuttable presumption that an agreement or covenant with a postemployment term of eighteen (18) months or less is reasonable as to duration.

(3) It shall be a rebuttable presumption that an agreement or covenant is reasonable as to geographic area if it is restricted to the geographic areas in which the key employee or key independent contractor provided services or had a significant presence or influence.

(4) It shall be a rebuttable presumption that an agreement or covenant is reasonable as to type of employment or line of business if it is limited to the type of employment or line of business conducted by the key employee or key independent contractor, as defined in section 44-2702, Idaho Code, while working for the employer.

It shall be a rebuttable presumption that an employee or independent contractor who is among the highest paid five percent (5%) of the employer’s employees or independent contractors is a "key employee" or a "key independent contractor." To rebut such presumption, an employee or independent contractor must show that it has no ability to adversely affect the employer’s legitimate business interests.

To the extent any such agreement or covenant is found to be unreasonable in any respect, a court shall limit or modify the agreement or covenant as it shall determine necessary to reflect the intent of the parties and render it reasonable in light of the circumstances in which it was made and specifically enforce the agreement or covenant as limited or modified.

This appeal concerns whether Sky Down Skydiving, LLC, improperly designated its tandem skydiving instructors and parachute packers as independent contractors, rather than as employees, thereby eliminating the need for worker’s compensation insurance.

Although non-competition clauses are permitted for independent contractors under Idaho Code section 44-2701, such a provision is more indicative of the type of control an employer typically exercises over an employee. The noncompete agreements at issue here restricted any tandem instructor’s or parachute packer’s ability to terminate his employment with Sky Down and it eliminated their opportunity to continue skydiving work within 100 miles of Sky Down for 18 months following the contract’s termination.

For the foregoing reasons we reverse the decision of the district court and remand with instructions to remand the case to the magistrate court for a new trial. Costs are awarded to the Industrial Commission.

"Key employees" and "key independent contractors" shall include those employees or independent contractors who, by reason of the employer’s investment of time, money, trust, exposure to the public, or exposure to technologies, intellectual property, business plans, business processes and methods of operation, customers, vendors or other business relationships during the course of employment, have gained a high level of inside knowledge, influence, credibility, notoriety, fame, reputation or public persona as a representative or spokesperson of the employer and, as a result, have the ability to harm or threaten an employer’s legitimate business interests.

"Legitimate business interests" shall include, but not be limited to, an employer’s goodwill, technologies, intellectual property, business plans, business processes and methods of operation, customers, customer lists, customer contacts and referral sources, vendors and vendor contacts, financial and marketing information, and trade secrets as that term is defined by chapter 8, title 48, Idaho Code.

The legislature has further enacted a list of rebuttable presumptions with respect to whether the duration, geographical area, and type of employment are reasonable.

Based on the district court’s failure to even address the applicability of the relevant Idaho statutes, we hold that the district court erred in granting summary judgment in favor of Blaskiewicz. It should first be noted that, at no point in its memorandum decision did the district court cite or analyze the statutes governing non-compete agreements in Idaho. Rather, the district court relied on Intermountain Eye and Freiburger, both of which pre-date the enactment of these statutes. See Intermountain Eye, 142 Idaho 218, 127 P.3d 121; Freiburger, 141 Idaho 415, 111 P.3d 100. While Intermountain Eye and Freiburger remain instructive, the district court’s failure to address the relevant statutes constitutes clear error.

However, even if the provision is too broad, the district court had within its power the ability to limit or modify the non-compete provision through blue-penciling.

For the foregoing reasons, we vacate the district court’s grant of summary judgment and remand the case for further proceedings.

(a) No employer shall enter into a covenant not to compete with any employee unless the employee's actual or expected annualized rate of earnings exceeds $75,000 per year. This amount shall increase to $80,000 per year beginning on January 1, 2027, $85,000 per year beginning on January 1, 2032, and $90,000 per year beginning on January 1, 2037. A covenant not to compete entered into in violation of this subsection is void and unenforceable.

(b) No employer shall enter into a covenant not to solicit with any employee unless the employee's actual or expected annualized rate of earnings exceeds $45,000 per year. This amount shall increase to $47,500 per year beginning on January 1, 2027, $50,000 per year beginning on January 1, 2032, and $52,500 per year beginning on January 1, 2037. A covenant not to solicit entered into in violation of this subsection is void and unenforceable.

(d) A covenant not to compete is void and illegal with respect to individuals covered by a collective bargaining agreement under the Illinois Public Labor Relations Act or the Illinois Educational Labor Relations Act. (e) A covenant not to compete or a covenant not to solicit is void and illegal with respect to individuals employed in construction, regardless of whether an individual is covered by a collective bargaining agreement. This subsection (e) does not apply to construction employees who primarily perform management, engineering or architectural, design, or sales functions for the employer or who are shareholders, partners, or owners in any capacity of the employer.

A covenant not to compete or a covenant not to solicit is illegal and void unless (1) the employee receives adequate consideration, (2) the covenant is ancillary to a valid employment relationship, (3) the covenant is no greater than is required for the protection of a legitimate business interest of the employer, (4) the covenant does not impose undue hardship on the employee, and (5) the covenant is not injurious to the public.

A covenant not to compete or a covenant not to solicit is illegal and void unless (1) the employer advises the employee in writing to consult with an attorney before entering into the covenant and (2) the employer provides the employee with a copy of the covenant at least 14 calendar days before the commencement of the employee's employment or the employer provides the employee with at least 14 calendar days to review the covenant.

"Adequate consideration" means (1) the employee worked for the employer for at least 2 years after the employee signed an agreement containing a covenant not to compete or a covenant not to solicit or (2) the employer otherwise provided consideration adequate to support an agreement to not compete or to not solicit, which consideration can consist of a period of employment plus additional professional or financial benefits or merely professional or financial benefits adequate by themselves.

(a) Extensive judicial reformation of a covenant not to compete or a covenant not to solicit may be against the public policy of this State and a court may refrain from wholly rewriting contracts. (b) In some circumstances, a court may, in its discretion, choose to reform or sever provisions of a covenant not to compete or a covenant not to solicit rather than hold such covenant unenforceable.

A restrictive covenant, assuming it is ancillary to a valid employment relationship, is reasonable only if the covenant: (1) is no greater than is required for the protection of a legitimate business interest of the employer-promisee; (2) does not impose undue hardship on the employee-promisor, and (3) is not injurious to the public.

However, we hold that such factors are only nonconclusive aids in determining the promisee's legitimate business interest, which in turn is but one component in the three-prong rule of reason, grounded in the totality of the circumstances.

"Covenant not to compete" means an agreement between an employer and an employee that is entered into after the effective date of this amendatory Act of the 102nd General Assembly that restricts the employee from performing: (1) any work for another employer for a specified period of time; (2) any work in a specified geographical area; or (3) work for another employer that is similar to employee's work for the employer included as a party to the agreement. "Covenant not to compete" also means an agreement between an employer and an employee, entered into after the effective date of this amendatory Act of the 102nd General Assembly, that by its terms imposes adverse financial consequences on the former employee if the employee engages in competitive activities after the termination of the employee's employment with the employer.

"Covenant not to compete" does not include (1) a covenant not to solicit, (2) a confidentiality agreement or covenant, (3) a covenant or agreement prohibiting use or disclosure of trade secrets or inventions, (4) invention assignment agreements or covenants, (5) a covenant or agreement entered into by a person purchasing or selling the goodwill of a business or otherwise acquiring or disposing of an ownership interest, (6) clauses or an agreement between an employer and an employee requiring advance notice of termination of employment, during which notice period the employee remains employed by the employer and receives compensation, or (7) agreements by which the employee agrees not to reapply for employment to the same employer after termination of the employee.

(c) No employer shall enter into a covenant not to compete or a covenant not to solicit with any employee who an employer terminates or furloughs or lays off as the result of business circumstances or governmental orders related to the COVID-19 pandemic or under circumstances that are similar to the COVID-19 pandemic, unless enforcement of the covenant not to compete includes compensation equivalent to the employee's base salary at the time of termination for the period of enforcement minus compensation earned through subsequent employment during the period of enforcement. A covenant not to compete or a covenant not to solicit entered into in violation of this subsection is void and unenforceable.

(f) Any covenant not to compete or covenant not to solicit entered into after January 1, 2025 (the effective date of Public Act 103-915) shall not be enforceable with respect to the provision of mental health services to veterans and first responders by any licensed mental health professional in this State if the enforcement of the covenant not to compete or covenant not to solicit is likely to result in an increase in cost or difficulty for any veteran or first responder seeking mental health services.

Factors which may be considered when deciding whether such reformation is appropriate include the fairness of the restraints as originally written, whether the original restriction reflects a good-faith effort to protect a legitimate business interest of the employer, the extent of such reformation, and whether the parties included a clause authorizing such modifications in their agreement.

In addition, the Attorney General may request and the court may impose a civil penalty not to exceed $5,000 for each violation or $10,000 for each repeat violation within a 5-year period. For purposes of this Section, each violation of this Act for each person who was subject to an agreement in violation of this Act shall constitute a separate and distinct violation.

For the foregoing reasons, the judgment of the appellate court and the order of the circuit court of Du Page County are reversed, and the cause is remanded to the circuit court for further proceedings consistent with this opinion. ¶ 49 Judgments reversed; ¶ 50 cause remanded.

Sec. 25. Remedies. In addition to any remedies available under any agreement between an employer and an employee or under any other statute, in a civil action or arbitration filed by an employer (including, but not limited to, a complaint or counterclaim), if an employee prevails on a claim to enforce a covenant not to compete or a covenant not to solicit, the employee shall recover from the employer all costs and all reasonable attorney's fees regarding such claim to enforce a covenant not to compete or a covenant not to solicit, and the court or arbitrator may award appropriate relief.

"Covenant not to solicit" means an agreement that is entered into after the effective date of this amendatory Act of the 102nd General Assembly between an employer and an employee that (1) restricts the employee from soliciting for employment the employer's employees or (2) restricts the employee from soliciting, for the purpose of selling products or services of any kind to, or from interfering with the employer's relationships with, the employer's clients, prospective clients, vendors, prospective vendors, suppliers, prospective suppliers, or other business relationships.

"Earnings" means the compensation, including earned salary, earned bonuses, earned commissions, or any other form of taxable compensation, reflected or that is expected to be reflected as wages, tips, and other compensation on the employee's IRS Form W-2 plus any elective deferrals not reflected as wages, tips, and other compensation on the employee's IRS Form W-2, such as, without limitation, employee contributions to a 401(k) plan, a 403(b) plan, a flexible spending account, or a health savings account, or commuter benefit-related deductions.

(a) Whenever the Attorney General has reasonable cause to believe that any person or entity is engaged in a pattern and practice prohibited by this Act, the Attorney General may initiate or intervene in a civil action in the name of the People of the State in any appropriate court to obtain appropriate relief.

In deciding whether to enforce a restrictive covenant, the court will apply a three-pronged test: (1) Is the restriction reasonably necessary for the protection of the employer’s business; (2) is it unreasonably restrictive of the employee’s rights; and (3) is it prejudicial to the public interest?

The problem with this approach is that, while Ehlers allows for modification of such agreements, it does not require a court to do so sua sponte.

A mere reference in a trial brief to the possibility of partial enforcement, without a pleading or rule 179(b) motion to pinpoint the issue, was not sufficient to preserve it for appeal.

We now overrule Brecher v. Brown (1945), 235 Iowa 627 , 17 N.W.2d 377 , and adopt the rule that unless the facts and circumstances indicate .bad faith on the part of the employer, we will enforce noncompetitive covenants to the extent they are reasonably necessary to protect his legitimate interests without imposing undue hardship on the employee when the public interest is not adversely affected.

While we recognize a distinction between a noncompetitive covenant in the sale of a business and one in an employment contract and because of countervailing policy considerations will not enforce the latter as freely, Baker v. Starkey (1966), 259 Iowa 480, 491 , 144 N.W.2d 889, 895 ; Cogley Clinic v. Martini (1962), 253 Iowa 541, 546 , 112 N.W.2d 678, 681 ; Mutual Loan Co. v. Pierce (1954), 245 Iowa 1051, 1055 , 65 N.W.2d 405, 407 ; Brecher v. Brown (1945), 235 Iowa 627, 631 , 17 N.W.2d 377, 379 ; see also Solari Industries, Inc. v. Malady (1970), 55 N.J. 571 , 264 A.2d 53, 56 ; we will enforce such covenant if it is reasonably necessary for the protection of the employer’s business and is not unreasonably restrictive of employee’s rights nor prejudicial to the public interest.

Lamp’s contract of employment, as manager of American Prosthetics’ Mason City *910 office, contained a covenant not to compete with the employer within 100 miles of any of its Iowa offices.

American Prosthetics argues that the restrictive covenant was enforceable as written. It has an alternative argument, however, that, in the event the court should find the restrictive covenant to be too broad to be enforced, it could modify it to allow partial enforcement.

We agree with the district court, and the court of appeals, that the restrictive covenant swept too broadly to be enforced as written. The evidence does not show such an extensive restriction is reasonably necessary to protect American Prosthetics.

In Ehlers this court, in effect, overruled a line of prior Iowa cases which had held that a covenant which was too restrictive to be enforced could not be modified to salvage the enforceable provisions.

The issue of partial enforcement was never raised by the pleadings in district court, although it was mentioned in a trial court brief. Following an adverse ruling by the district court in which the issue was not addressed, American Pros-thetics simply filed a notice of appeal. It did not file a motion under Iowa Rule of Civil Procedure 179(b) to bring the issue to the court’s attention.

In the face of these principles, a court must necessarily approach the issue of modification with a certain degree of reluctance. We believe in this case that, where the issue was not properly raised in district court, we should not address it for the first time on appeal. Shill v. Careage Corp., 353 N.W.2d 416, 421 (Iowa 1984).

We conclude that failure to raise the issue in district court waived it for purposes of appeal. DECISION OF COURT OF APPEALS AND JUDGMENT OF DISTRICT COURT AFFIRMED. All Justices concur except REYNOLD-SON, C.J., who concurs in the result.

A noncompetition covenant ancillary to an employment contract is valid and enforceable if the restraint is reasonable under the circumstances and not adverse to the public welfare.

The analysis of whether the noncompetition clause is reasonable evaluates these factors: (1) Does the covenant protect a legitimate business interest of the employer? (2) Does the covenant create an undue burden on the employee? (3) Is the covenant injurious to the public welfare? (4) Are the time and territorial limitations contained in the covenant reasonable? The determination of reasonableness is made on the particular facts and circumstances of each case.

The rationale for enforcing a noncompetition covenant is based on the freedom of contract. See Francis v. Schlotfeldt, 10 Kan. App. 2d 517, 518 , 704 P.2d 381 (1985). However, it is well settled that only a legitimate business interest may be protected by a noncompetition covenant. If the sole purpose is to avoid ordinary competition, it is unreasonable and unenforceable. Eastern Distributing, 222 Kan. at 671 ; see EVCO Distributing, 6 Kan. App. 2d 53 , Syl. ¶ 5. Additionally, noncompetition covenants included in employment contracts are strictly construed against the employer.

(b) Except as otherwise provided in subsections (d) and (e), the Kansas restraint of trade act shall be construed in harmony with ruling judicial interpretations of federal antitrust law by the United States supreme court. If such judicial interpretations are in conflict with or inconsistent with the express provisions of subsection (c), the provisions of subsection (c) shall control. If a covenant that is not presumed to be enforceable pursuant to subsection (c) is determined to be overbroad or otherwise not reasonably necessary to protect a business interest of the business entity seeking enforcement of the covenant, the court shall modify the covenant, enforce the covenant as modified and grant only the relief reasonably necessary to protect such interests.

A covenant in writing in which an employee agrees not to solicit, recruit, induce, persuade, encourage, direct or otherwise interfere with, directly or indirectly, a business entity's customers, including any reduction, termination, acceptance or transfer of any customer's business, in whole or in part, for the purpose of providing any product or service that is competitive with those provided by the employer shall be conclusively presumed to be enforceable and not a restraint of trade if the covenant is limited to material contact customers and the covenant is between an employer and an employee and does not continue for more than two years following the end of the employee's employment with the employer.

Notwithstanding the presumption of enforceability provided in subsections (c)(2) through (c)(5), an employee or owner shall be permitted to assert any applicable defense available at law or in equity for the court's consideration in a dispute regarding a written covenant.

"Material contact customer" means any customer or prospective customer that is solicited, produced or serviced, directly or indirectly, by the employee or owner at issue or any customer or prospective customer about whom the employee or owner, directly or indirectly, had confidential business or proprietary information or trade secrets in the course of the employee's or owner's relationship with the customer.

(e) The Kansas restraint of trade act shall not be construed to apply to: (1) Any association that complies with the provisions and application of article 16 of chapter 17 of the Kansas Statutes Annotated, and amendments thereto, the cooperative marketing act; (2) any association, trust, agreement or arrangement that is governed by the provisions and application of 7 U.S.C. § 291 et seq., the Capper-Volstead act; (3) any corporation organized under the electric cooperative act, K.S.A. 17-4601 et seq., and amendments thereto, or which becomes subject to the electric cooperative act in any manner therein provided; or any limited liability company or corporation, or wholly owned subsidiary thereof, providing electric service at wholesale in the state of Kansas that is owned by four or more electric cooperatives that provide retail service in the state of Kansas; or any member-owned corporation formed prior to 2004; (4) any association that is governed by the provisions and application of article 22 of chapter 17 of the Kansas Statutes Annotated, and amendments thereto, the credit union act;

(2) A covenant in writing in which an owner agrees to not solicit, recruit, induce, persuade, encourage, direct or otherwise interfere with, directly or indirectly, one or more employees or owners of a business entity for the purpose of interfering with the employment or ownership relationship of such employees or owners shall be conclusively presumed to be enforceable and not a restraint of trade if the covenant is between a business entity and an owner of the business entity and the covenant does not continue for more than four years following the end of the owner's business relationship with the business entity.

(3) A covenant in writing in which an owner agrees to not solicit, induce, persuade, encourage, service, direct or otherwise interfere with, directly or indirectly, a business entity's customers, including any reduction, termination, acceptance or transfer of any customer's business, in whole or in part, for the purpose of providing any product or service that is competitive with those provided by the business entity shall be conclusively presumed to be enforceable and not a restraint of trade if the covenant is limited to material contact customers and the covenant does not continue for more than four years following the end of the owner's business relationship with the business entity.

(4) A covenant in writing in which an employee of a business entity agrees to not solicit, recruit, induce, persuade, encourage, direct or otherwise interfere with, directly or indirectly, one or more employees or owners of a business entity for the purpose of interfering with the employment or ownership relationship of such employees or owners shall be conclusively presumed to be enforceable and not a restraint of trade if the covenant is between an employer and one or more employees and the covenant: (A) Seeks, on the part of the employer, to protect confidential or trade secret business information or customer or supplier relationships, goodwill or loyalty; or (B) does not continue for more than two years following the employee's employment.

(5) any association, trust, agreement or arrangement that is governed by the provisions and application of 7 U.S.C. § 181 et seq., the packers and stockyards act; and (6) any franchise agreements or covenants not to compete.

(c) (1) An arrangement, contract, agreement, trust, understanding or combination shall not be deemed a trust pursuant to the Kansas restraint of trade act and shall not be deemed unlawful, void, prohibited or wrongful under any provision of the Kansas restraint of trade act if that arrangement, contract, agreement, trust, understanding or combination is a reasonable restraint of trade or commerce. An arrangement, contract, agreement, trust, understanding or combination is a reasonable restraint of trade or commerce if such restraint is reasonable in view of all of the facts and circumstances of the particular case and does not contravene public welfare.

We are required to enforce the noncompetition covenant and affirm the trial court’s grant of an injunction.

Every contract or agreement, or provision thereof, by which anyone is restrained from exercising a lawful profession, trade, or business of any kind, except as provided in this Section, shall be null and void. However, every contract or agreement, or provision thereof, which meets the exceptions as provided in this Section, shall be enforceable.

Any person, including a corporation and the individual shareholders of such corporation, who is employed as an agent, servant, or employee may agree with his employer to refrain from carrying on or engaging in a business similar to that of the employer and/or from soliciting customers of the employer within a specified parish or parishes, municipality or municipalities, or parts thereof, so long as the employer carries on a like business therein, not to exceed a period of two years from termination of employment. An independent contractor, whose work is performed pursuant to a written contract, may enter into an agreement to refrain from carrying on or engaging in a business similar to the business of the person with whom the independent contractor has contracted, on the same basis as if the independent contractor were an employee, for a period not to exceed two years from the date of the last work performed under the written contract.

The provisions of every employment contract or agreement, or provisions thereof, by which any foreign or domestic employer or any other person or entity includes a choice of forum clause or choice of law clause in an employee's contract of employment or collective bargaining agreement, or attempts to enforce either a choice of forum clause or choice of law clause in any civil or administrative action involving an employee, shall be null and void except where the choice of forum clause or choice of law clause is expressly, knowingly, and voluntarily agreed to and ratified by the employee after the occurrence of the incident which is the subject of the civil or administrative action.

we interpret the limited exception found in § 921(C) to the general nullity of such agreements to apply only to those agreements in which the employee agrees to refrain from carrying on or engaging in his own business similar to that of the employer.

For the purposes of Subsections B, C, E, F, J, K, and L of this Section, a person who becomes employed by a competing business, regardless of whether or not that person is an owner or equity interest holder of that competing business, may be deemed to be carrying on or engaging in a business similar to that of the party having a contractual right to prevent that person from competing.

SWAT 24 Shreveport Bossier, Inc. v. Bond, 2000-1695, p. 20 (La. 6/29/01), 808 So.2d 294, 307, superseded by statute on other grounds.

B. Any person, including a corporation and the individual shareholders of such corporation, who sells the goodwill of a business may agree with the buyer that the seller or other interested party in the transaction, will refrain from carrying on or engaging in a business similar to the business being sold or from soliciting customers of the business being sold within a specified parish or parishes, or municipality or municipalities, or parts thereof, so long as the buyer, or any person deriving title to the goodwill from him, carries on a like business therein, not to exceed a period of two years from the date of sale.

E. Upon or in anticipation of a dissolution of the partnership, the partnership and the individual partners, including a corporation and the individual shareholders if the corporation is a partner, may agree that the partners shall refrain from carrying on or engaging in a similar business within the same parish or parishes, or municipality or municipalities, or within specified parts thereof, where the partnership business has been transacted, not to exceed a period of two years from the date of dissolution. F.(1) Parties to a franchise may agree that: (a) The franchisor shall refrain from selling, distributing, or granting additional franchises to sell or distribute, within defined geographic territory, those products or services which are the subject of the franchise. (b) The franchisee shall: (i) During the term of the franchise, refrain from competing with the franchisor or other franchisees of the franchisor or carrying on or engaging in any other business similar to that which is the subject of the franchise. (ii) For a period not to exceed two years following severance of the franchise relationship, refrain from carrying on or engaging in any other business similar to that which is the subject of the franchise and from competing with or soliciting the customers of the franchisor or other franchisees of the franchisor.

G.(1) An employee may at any time enter into an agreement with his employer that, for a period not to exceed two years from the date of the termination of employment, he will refrain from engaging in any work or activity to design, write, modify, or implement any computer program that directly competes with any confidential computer program owned, licensed, or marketed by the employer, and to which the employee had direct access during the term of his employment or services.

M.(1) Any provision in a contract or agreement which restrains a primary care physician from practicing medicine shall not exceed three years from the effective date of the initial contract or agreement. Any subsequent contract or agreement between the employer and primary care physician executed after the initial three-year term shall not include noncompete provisions. (2) If the contract or agreement provided for in Paragraph (1) of this Subsection is terminated by the primary care physician prior to the initial three-year term, the primary care physician may be prohibited from carrying on or engaging in a business similar to that of the employer in the parish in which the primary care physician's principal practice is located and no more than two contiguous parishes in which the employer carries on a like business. The parishes shall be specified in the contract or agreement. The prohibition authorized in this Paragraph shall not exceed a period of more than two years from termination of employment. (3) For purposes of this Subsection, "primary care physician" means a physician who predominantly practices general family medicine, general internal medicine, general pediatrics, general obstetrics, or general gynecology. For any other physician, the provisions of Subsection N of this Section shall apply.

N.(1) For any physician other than a primary care physician as defined in Subsection M of this Section, any provision in a contract or agreement which restrains the physician from practicing medicine shall not exceed five years from the effective date of the initial contract or agreement. Any subsequent contract or agreement executed between the employer and the physician after the initial five-year term shall not include noncompete provisions. (2) If the contract or agreement provided for in Paragraph (1) of this Subsection is terminated by the physician prior to the initial five-year term, the physician may be prohibited from carrying on or engaging in a business similar to that of the employer in the parish in which the physician's principal practice is located and no more than two contiguous parishes in which the employer carries on a like business. The parishes shall be specified in the contract or agreement. The prohibition authorized in this Paragraph shall not exceed a period of more than two years from termination of employment.

Acts 2003, No. 428, §§1 and 2; Acts 2006, No. 436, §1; Acts 2008, No. 399, §1; Acts 2008, No. 711, §1; Acts 2010, No. 164, §1; Acts 2015, No. 404, §1; Acts 2020, No. 121, §1; Acts 2024, No. 273, §1, eff. Jan.1, 2025.

H. Any agreement covered by Subsection B, C, E, F, G, J, K, or L of this Section shall be considered an obligation not to do, and failure to perform may entitle the obligee to recover damages for the loss sustained and the profit of which he has been deprived. In addition, upon proof of the obligor's failure to perform, and without the necessity of proving irreparable injury, a court of competent jurisdiction shall order injunctive relief enforcing the terms of the agreement. Any agreement covered by Subsection J, K, or L of this Section shall be null and void if it is determined that members of the agreement were engaged in ultra vires acts. Nothing in Subsection J, K, or L of this Section shall prohibit the transfer, sale, or purchase of stock or interest in publicly traded entities.

I.(1) There shall be no contract or agreement or provision entered into by an automobile salesman and his employer restraining him from selling automobiles.

J. A corporation and the individual shareholders of such corporation may agree that such shareholders will refrain from carrying on or engaging in a business similar to that of the corporation and from soliciting customers of the corporation within a specified parish or parishes, municipality or municipalities, or parts thereof, for as long as the corporation carries on a similar business therein, not to exceed a period of two years from the date such shareholder ceases to be a shareholder of the corporation. A violation of this Subsection shall be enforceable in accordance with Subsection H of this Section. K. A partnership and the individual partners of such partnership may agree that such partners will refrain from carrying on or engaging in a business similar to that of the partnership and from soliciting customers of the partnership within a specified parish or parishes, municipality or municipalities, or parts thereof, for as long as the partnership carries on a similar business therein, not to exceed a period of two years from the date such partner ceases to be a partner. A violation of this Subsection shall be enforceable in accordance with Subsection H of this Section. L. A limited liability company and the individual members of such limited liability company may agree that such members will refrain from carrying on or engaging in a business similar to that of the limited liability company and from soliciting customers of the limited liability company within a specified parish or parishes, municipality or municipalities, or parts thereof, for as long as the limited liability company carries on a similar business therein, not to exceed a period of two years from the date such member ceases to be a member. A violation of this Subsection shall be enforceable in accordance with Subsection H of this Section.

O.(1) The provisions of Subsections M and N of this Section shall not apply to the following physicians: (a) Any physician who is employed by or under contract with a rural hospital as provided for in the Rural Hospital Preservation Act, R.S. 40:1189.1 et seq. (b) Any physician who is employed by or under contract with a federally qualified healthcare center as defined in R.S. 40:1183.3 and which operates in a rural parish as designated by the federal Office of Management and Budget at the time that the physician is hired. (2) For any physician exempted in this Subsection, the provisions of Subsection C, J, K, or L of this Section shall apply.

For the foregoing reasons, we conclude the language of La. R.S. 23:921(C) allows an employee to agree to refrain from carrying on or engaging in the employee's own business similar to that of the employer, subject to certain geographical and time limitations. Because the language of the Agreement at issue went beyond that permitted by the narrow exception of La. R.S. 23:921(C), we declare those offending portions null and void and sever them. The remaining portions of the Agreement cannot be construed to prohibit the actions the employee has taken subsequent to the termination of this employment with his former employer. The judgment of the court of appeal is therefore affirmed, and the case is remanded to the trial court for consideration of Bond's reconventional demands not yet considered. AFFIRMED AND REMANDED.

Based on the foregoing reasons, the non-compete agreement is enforceable as it meets the exceptions as provided for in La. R.S. 23:921(C) and (D). Accordingly, we amend and affirm as amended the district court’s judgment.

La. R.S. 23:1292(H) allows the issuance of a preliminary injunction, without a showing of irreparable harm, as one of the remedies to enforce a non-compete agreement. In the case sub judice, we find no abuse of the district court’s discretion to grant a preliminary injunction to enforce the non-compete agreement.

Second, a preliminary injunction that extends for up to two years from the date of judgment impermissibly extends the time period to restrict competition 17 allowed by law that Mr. Smith and Priority contracted for in the non-compete agreement. The non-compete agreement unambiguously stated that Mr. Smith would be prohibited from competition for “two years from the date of termination,” the time period that complies with the statutory period permitted by La. R.S. 23:1292(C). As such, based on the four corners of the contract, the maximum duration Mr. Smith can be preliminarily or permanently enjoined from competing with Priority is two years from the date of his termination

"Noncompete agreement" means a contract or contract provision that prohibits an employee or prospective employee from working in the same or a similar profession or in a specified geographic area for a certain period of time following termination of employment.

Noncompete agreements are contrary to public policy and are enforceable only to the extent that they are reasonable and are no broader than necessary to protect one or more of the following legitimate business interests of the employer:

A noncompete agreement may be presumed necessary if the legitimate business interest cannot be adequately protected through an alternative restrictive covenant, including but not limited to a nonsolicitation agreement or a nondisclosure or confidentiality agreement.

B. The employer's confidential information that does not qualify as a trade secret; or [PL 2019, c. 513, §1 (NEW).] C. The employer's goodwill.

Notwithstanding subsection 2 , an employer may not require or permit an employee to enter into a noncompete agreement with the employer if: A. The employee is earning wages at or below 400% of the federal poverty level; or [PL 2023, c. 118, §1 (NEW).] B. The employee is a veterinarian licensed under Title 32, chapter 71‑A and is employed in a veterinary facility in which the employee does not have an ownership interest.

An employer shall notify an employee or prospective employee of a noncompete agreement requirement and provide a copy of the noncompete agreement not less than 3 business days before the employer requires the agreement to be signed

An employer that violates subsection 3 or 4 commits a civil violation for which a fine of not less than $5,000 may be adjudged.

This section applies to all noncompete agreements entered into or renewed after the effective date of this section.

A court may not enforce a noncompete agreement entered into or renewed with an employee who is a veterinarian licensed under Title 32, chapter 71‑A before the effective date of this paragraph unless the employee is working in a veterinary facility in which the employee has an ownership interest.

Prohibits or restricts one employer from soliciting or hiring another employer's employees or former employees.

For purposes of this section, "restrictive employment agreement" means an agreement that: A. Is between 2 or more employers, including through a franchise agreement or a contractor and subcontractor agreement; and [PL 2019, c. 513, §1 (NEW).] B. Prohibits or restricts one employer from soliciting or hiring another employer's employees or former employees.

An employer may not: A. Enter into a restrictive employment agreement; or [PL 2019, c. 513, §1 (NEW).] B. Enforce or threaten to enforce a restrictive employment agreement.

An employer that violates subsection 2 commits a civil violation for which a fine of not less than $5,000 may be adjudged.

Upon any agreement to refrain from carrying on or engaging in any trade, business, occupation or profession for any term of years or within any defined territory or both; the provisions of this subsection shall not apply to any such agreement made prior to August 13, 1947;

Employment itself has been held to be consideration for a noncompetition covenant in an employment contract.

We recognize that protecting an employer from business competition is not a legitimate business interest to be advanced by such an agreement.

because the reasonableness of a noncompetition agreement depends on the specific facts of the case, we assess the agreement only as Brignull has sought to apply it and not as it might have been enforced on its terms.

The trial court found, however, that the purpose of this agreement was to prevent Albert from taking Brignull’s existing patients and to protect the goodwill of BrignulPs business. Finally, because the reasonableness of a noncompetition agreement depends on the specific facts of the case, we assess the agreement only as Brignull has sought to apply it and not as it might have been enforced on its terms. Id. We agree with the trial court’s finding that prohibiting Albert from competing within two miles of Brig-null’s office and within sixteen months after leaving the job was reasonable.

To be enforceable, however, restrictive covenants must be reasonable. The reasonableness of a restrictive covenant is a question of law.

Proper restrictive covenants cannot preclude former employees from “following any trade or calling for which he is fitted and from which he may earn his livelihood” or “exercising the skill and general knowledge he has acquired or increased through experience or even instructions while in the employment.” Roy, 140 Me. at 107 , 34 A.2d at 481 . To be enforceable the “agreement must impose no undue hardship upon the employee and be no wider in its scope than is reasonably necessary for the protection of the business of the employer.

The nondisclosure clause in the Bernier-Merrill employment contract is reasonable. We uphold the court’s conclusion that paragraph 3 reasonably prohibits Bernier from using particularized, highly specialized proprietary protected original work that was custom designed for a particular prospect. In balancing Bernier’s interest in securing employment and Merrill’s interest in protecting the confidential information it created, we find that the agreement does not pose an undue hardship on Bernier

A. The employer's trade secrets, as defined in Title 10, section 1542, subsection 4 ;

B. The employer's confidential information that does not qualify as a trade secret; or

Except for a noncompete agreement between an employer and an allopathic physician or an osteopathic physician licensed under Title 32, chapter 48 or chapter 36 , respectively, the terms of a noncompete agreement do not take effect until after one year of the employee's employment with the employer or a period of 6 months from the date the agreement was signed, whichever is later.

Any covenant not to compete contained in a contract or agreement is void and unenforceable.

"Covenant not to compete" means an agreement between an employee and employer that restricts the employee, after termination of the employment, from performing: (1) work for another employer for a specified period of time; (2) work in a specified geographical area; or (3) work for another employer in a capacity that is similar to the employee's work for the employer that is party to the agreement.

"Employee" as used in this section means any individual who performs services for an employer, including independent contractors.

Notwithstanding paragraph (a), a covenant not to compete is valid and enforceable if: (1) the covenant not to compete is agreed upon during the sale of a business. The person selling the business and the partners, members, or shareholders, and the buyer of the business may agree on a temporary and geographically restricted covenant not to compete that will prohibit the seller of the business from carrying on a similar business within a reasonable geographic area and for a reasonable length of time; or (2) the covenant not to compete is agreed upon in anticipation of the dissolution of a business. The partners, members, or shareholders, upon or in anticipation of a dissolution of a partnership, limited liability company, or corporation may agree that all or any number of the parties will not carry on a similar business within a reasonable geographic area where the business has been transacted.

Nothing in this subdivision shall be construed to render void or unenforceable any other provisions in a contract or agreement containing a void or unenforceable covenant not to compete.

A covenant not to compete does not include a nondisclosure agreement, or agreement designed to protect trade secrets or confidential information. A covenant not to compete does not include a nonsolicitation agreement, or agreement restricting the ability to use client or contact lists, or solicit customers of the employer.

In addition to injunctive relief and any other remedies available, a court may award an employee who is enforcing rights under this section reasonable attorney fees.

(a) No service provider may restrict, restrain, or prohibit in any way a customer from directly or indirectly soliciting or hiring an employee of a service provider. (b) Any provision of an existing contract that violates paragraph (a) is void and unenforceable.

"Independent contractor" means any individual whose employment is governed by a contract and whose compensation is not reported to the Internal Revenue Service on a W-2 form. For purposes of this section, independent contractor also includes any corporation, limited liability corporation, partnership, or other corporate entity when an employer requires an individual to form such an organization for purposes of entering into a contract for services as a condition of receiving compensation under an independent contractor agreement.

This section does not apply to workers providing professional business consulting for computer software development and related services who are seeking employment through a service provider with the knowledge and intention of being considered for a permanent position of employment with the customer as their employer at a later date.

Any contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind, otherwise than is provided for by 28-2-704 or 28-2-705 , is to that extent void.

A person who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business within the areas provided in subsection (2) so long as the buyer or any person deriving title to the goodwill from the buyer carries on a like business in the described areas.

Partners may, upon dissolution of the partnership, agree that one or more of them may not carry on a similar business within the areas provided in 28-2-704 (2).

a covenant is a reasonable restraint on the profession of public accounting: “(1) the covenant should be limited in operation either as to time or place; (2) the covenant should be based on some good consideration; and (3) the covenant should afford a reasonable protection for and not impose an unreasonable burden upon the employer, the employee or the public.” This test requires a balancing of the competing interests of the public as well as the employer and employee. We hold that the written contract provisions do not constitute a restraint prohibited by Section 28-2-703, MCA.

Wrigg agrees that the JCCS covenant imposes a partial restraint on trade. We review for reasonableness covenants that impose a partial restraint on trade.

The following agreements are invalid unless the agreement or some note or memorandum of the agreement is in writing and subscribed by the party to be charged or the party's agent: (a) an agreement that by its terms is not to be performed within a year from the making of the agreement;

The agreement authorized in subsection (1) may apply in: (a) the city where the principal office of the business is located; (b) the county where the principal office of the business is located; (c) a city in any county adjacent to the county in which the principal office of the business is located; (d) any county adjacent to the county in which the principal office of the business is located; or (e) any combination of the areas in subsections (2)(a) through (2)(d).

To be upheld as reasonable, a covenant not to compete must meet three requirements: 5 (1) [I]t must be partial or restricted in its operation in respect either to time or place; (2) it must be on some good consideration; and (3) it must be reasonable, that is, it should afford only a fair protection to the interests of the party in whose favor it is made, and must not be so large in its operation as to interfere with the interests of the public.

An agreement not to compete must satisfy all three prongs of the reasonableness test in order to be upheld.

As noted above in ¶ 21, § 28-2-703, MCA, provides that a contract which is determined to unreasonably restrain trade “is to that extent void.” Section 28-2-604, MCA, titled “when contract partially void,” provides that a contract with several distinct objects of which one is lawful and one is unlawful, the contract is void as to the latter and valid as to the rest. Therefore, the noncompetition covenant in the Clinic partnership agreements would be severable from the remainder of the agreement should a determination be made that it is unlawful.

We void covenants that act as a full restraint on trade and in absence of an express statutory exception.

We adopt expressly the requirement that an employer must establish a legitimate business interest as a threshold step to our analysis of the reasonableness of a covenant.

These cases demonstrate that a legitimate business interest in a covenant requiresthat a restriction on post-employment activities be necessary to protect an employer’s good will, customer relationships, or trade information.

We agree that an employer normally lacks a legitimate business interest in a covenant when it chooses to end the employment relationship. Maintenance of the employment relationship represents an employer's best method to prevent competition from an employee.

JCCS elected to terminate its employment relationship with Wrigg, and, accordingly, cannot enforce its covenant under these circumstances. Rao, 718 F.2d at 224. We reverse and remand with instructions to the District Court to vacate its declaration that JCCS can enforce its covenant and enter judgment in Wrigg’s favor.

Access Organics’s initial offer of employment to Hernandez is past consideration and may not serve as consideration for the non-compete agreement signed four months later.

Non-compete agreements entered into by existing employees may be supported by independent consideration. For example, an employer may provide an employee with a raise or promotion in exchange for signing a non-compete agreement. In such instances, the salary increase or promotion serves as good consideration.

Since the agreement between Hernandez and Access Organics lacks consideration, we need not reach the other two prongs. The agreement violates § 28-2-703, MCA, and is unenforceable.

Where a contract has several distinct objects of which one at least is lawful and one at least is unlawful, in whole or in part, the contract is void as to the latter and valid as to the rest.

In determining whether a covenant not to compete is valid, a court considers whether the restriction is (1) reasonable in the sense that it is not injurious to the public, (2) not greater than is reasonably necessary to protect the employer in some legitimate interest, and (3) not unduly harsh and oppressive on the employee.

It only prevented him from business contacts with those customers with whom he had personal business dealings during the last 2 years of his employment with Aon. The agreement was properly focused on the legitimate purpose of protecting Aon's goodwill with its customers. We conclude that the nonsolicitation agreement was reasonable in the sense that it is not injurious to the public, not greater than reasonably necessary to protect Aon's legitimate interest in retaining the goodwill of its customers with whom Pearson dealt personally, and not unduly harsh and oppressive on Pearson.

The provision of the agreement which states that a court may reform the covenant is of no effect. Private parties may not confer upon the court powers which it does not possess.

Because we find that the covenant is not subject to modification, we must either enforce it as written or not enforce it at all.

A minority of the courts which have addressed the question have held that courts may not revise an agreement so as to make it enforceable. These courts have reasoned that reformation is tantamount to the construction of a private agreement and that the construction of private agreements is not within the power of the courts. See, Rollins Protective Svcs. Co. v. Palermo, 249 Ga. 138 , 287 S.E.2d 546 (1982); Rector-Phillips-Morse v. Vroman, 253 Ark. 750 , 489 S.W.2d 1 (1973). We find the minority view the most reasonable view and the view which is most in harmony with existing precedent.

Though this position against the severability of noncompete covenants is the minority one, it is backed by important public policy considerations.

This court has long held that it is not the function of the courts to reform a covenant not to compete in order to make it enforceable.

We decline Jani-King’s invitation to reconsider our rejection of the blue pencil rule.

Our jurisprudence thus reflects a consistent refusal to strike or alter the language of an integrated covenant not to compete in order to make it enforceable.

Nebraska courts are generally more willing to uphold promises to refrain from competition made in the context of the sale of goodwill as a business asset than those made in connection with contracts of employment.

Because we conclude that this franchise agreement is akin to a sale of a business, the “customer specific” rule articulated in those cases is not applicable. Instead, in the case of a covenant not to compete ancillary to the sale of a business, a restraint is enforceable if it is reasonable in both time and scope.

Upon a de novo review of the record, we find, as a matter of law, that unreasonable covenants are not enforceable and are not subject to reformation.

It is not the function of courts to reform unreasonable covenants not to compete solely for the purpose of making them legally enforceable. The district court erred in reforming the covenant in this case.

Without deciding whether any other restriction in the covenant was reasonable or unreasonable, we find that because the covenant attempts to restrict Vlasin from soliciting or working with anyone, rather than just Johnson’s clients with whom Vlasin did business and had personal contact, it is greater than is reasonably necessary to protect Johnson’s legitimate interest in customer goodwill. Thus, the covenant is unreasonable and unenforceable.

From these cases, then, a rule regarding the validity of a covenant not to compete which is aimed at preventing a former employee from unfairly appropriating the customer goodwill which properly belongs to the employer can be gleaned. Such a covenant may be valid only if it restricts the former employee from working for or soliciting the former employer’s clients or accounts with whom the former employee actually did business and has personal contact.

Because the covenant not to compete in this case attempts to restrict Polly from soliciting or working for Hilderman’s clients with whom Polly did not work and did not even know, it is greater than is reasonably necessary to protect Hilderman’s legitimate interest in customer goodwill, and is thus unreasonable and unenforceable.

Not only did the covenant fail to limit its terms to those clients with whom Mertz actually did business or had personal contact, it fails to limit itself in any way to Pharmacists’ existing client base in Nebraska.

We limit PBS to the allegations made in its petition and require that it show that Rosno actually did business and had personal contact with “virtually all” of PBS’ clients.

We conclude that the covenant not to compete in the employment agreement is greater than is reasonably necessary to protect PBS and is unenforceable.

We have determined above that the noncompete agreement in this case is unreasonable, and we do not reform it to make it enforceable.

a covenant not to compete is available to prevent unfair competition by a former employee but is not available to shield an employer against ordinary competition

The covenants’ limited applicability to customers and area leaves open to Squier a rather vast market in the insurance business.

The absence of specified geographic applicability of the *764 noncompetition covenants presents no problem under the circumstances inasmuch as Squier can conduct an insurance agency in Lincoln or any other location, provided that he does not draw customers from the pools prohibited by the covenants.

the covenant not to compete prohibited Vodra’s soliciting American’s customers contacted in the combined circumstances, conditions, or situations specified in that covenant. Such restriction on Vodra, as a former employee of American, provides minimal restraint on competition and is reasonable.

An unreasonable covenant not to compete is of no effect, and its scope cannot be judicially reformed in order to make it enforceable.

On the basis of our de novo review, we conclude that the scope and duration of the restraint on competition imposed by the covenant not to compete ancillary to the sale of Beller’s business was greater than reasonably necessary to protect the legitimate business interests of Presto-X. Therefore, the covenant is contrary to public policy and void.

If restrictions in a noncompete agreement are found by an arbitrator or a court to be unreasonable in restraining competition, the arbitrator or court shall reform the terms of the noncompete agreement to the extent necessary to cause the restrictions contained therein to be reasonable and enforceable.

Notwithstanding section 87-403 , this subsection also applies to any noncompete agreement entered into by a franchisor headquartered in the State of Nebraska, unless otherwise agreed to by the franchisor and franchisee. This subsection applies to any noncompete agreement entered into before, on, or after April 8, 2016.

Noncompete agreement means any agreement between a franchisor and a franchisee, a guarantor, or any person with a direct or indirect beneficial interest in the franchise that restricts the business activities in which such persons may engage during or after the term of the franchise. Noncompete agreement includes any stand-alone agreement or any covenant not to compete provision within a franchise agreement or ancillary agreement.

A health care staffing agency shall not: (a) Include in any contract with a worker or a health care entity a noncompete clause restricting in any manner the employment opportunities of a worker

A transportation network company shall not require a participating driver to sign an agreement not to compete with the company in order to be matched with passengers through the company's online-enabled application or platform.

Jani-King’s 1-year restraint prohibited the franchisee from operating a “Competing Business” “in any other territory in which a Jani-King fran- chise operates.” Since Jani-King operates on a multi-state and international basis, on continents as far away as Australia, the restriction from competing in “any . . . territory in which a Jani-King franchise operates” is similar to having no territo- rial restriction at all. We find that this is unreasonable in geo- graphic scope. And because this 1-year restraint is not sever- able from the 2-year restraint also presented by this covenant, the entire noncompete agreement is unenforceable.

It also prohibited a franchisee from operating for a period of 1 year a competing business in any other territory in which a Jani-King franchise operates.

Newman agrees and covenants that he will not, for a period of five (5) years after the date of this Covenant, and anywhere in the United States, the continent of North America, or anywhere else on earth, or such lesser period of time or geographical area restriction as a court of law might later determine to be the limits of enforceability of this covenant, (a) directly or indirectly solicit electrochemical metalizing business regarding railroad axles and/or mounted wheel sets....

To the extent that Dana F. Cole & Co. can be interpreted as an exception to the rule set forth in Polly v. Ray D. Hilderman & Co., supra, it is disapproved and overruled.

In Polly , this court reviewed Dana F. Cole & Co. v. Byerly, 211 Neb. 903 , 320 N.W.2d 916 (1982), and observed that Dana F. Cole & Co., by virtue of its facts, presented an exception to the general rule.

(2) Any clause of a contract that violates this section is void.

he shall not directly or indirectly solicit, contact or perform services for any of Employer’s clients for his own benefit or as an officer, director, shareholder, partner, advisor, consultant or employee of any third party.

Sections 87-401 to 87-410 apply only to a franchise (1) the performance of which contemplates or requires the franchisee to establish or maintain a place of business within the State of Nebraska, (2) when gross sales of products or services between the franchisor and franchisee covered by such franchise shall have exceeded thirty-five thousand dollars for the twelve months next preceding the institution of suit pursuant to sections 87-401 to 87-410 , and (3) when more than twenty percent of the franchisee's gross sales are intended to be or are derived from such franchise.

for a period of three (3) years within the geographical territory serviced by the Representative at the time of termination of this agreement or in any territory serviced by him/her within three (3) *707 years prior to his/her termination.

We are entirely satisfied that the time is well due for the abandonment of New Jersey's void per se rule in favor of the rule which permits the total or partial enforcement of noncompetitive agreements to the extent reasonable under the circumstances.

In Solari, supra, 55 N. J. 571, we recently adopted the judicial rule that noncompetitive agreements may receive total or partial enforcement to the extent reasonable under the circumstances. However, we pointed out that while a seller’s noncompetitive covenant designed to protect the good will of the business for the buyer is freely enforceable, an employee’s covenant not to compete after the termination of his employment is not as freely enforceable because of well recognized countervailing policy considerations. 55 N. J. at 576. Nonetheless an employee’s covenant will be given effect if it is reasonable under all the circumstances of his particular case; it will generally be found to be reasonable if it “simply protects the legitimate interests of the employer, imposes no undue hardship *33 on the employee, and is not injurious to the public.” 55 N. J. at 576. The employer has no legitimate interest in preventing competition as such; the authorities generally recognize this (Blake, supra, 73 Harv. L. Rev. at 652; Corbin, supra at 100) and the underlying policy finds recent legislative expression in New Jersey’s Antitrust Act. L. 1970, c. 73; N. J. S. A. 56:9-l et seq. But the employer has a patently legitimate interest in protecting his trade secrets as well as his confidential business information and he has an equally legitimate interest in protecting his customer relationships.

The order granting the preliminary injunction below is: Beversed and the cause is remanded to the Chancery Division for further proceedings.

That test requires us to determine whether (1) the restrictive covenant was necessary to protect the employer's legitimate interests in enforcement, (2) whether it would cause undue hardship to the employee, and (3) whether it would be injurious to the public. Karlin, supra, 77 N.J. at 417 , 390 A. 2d 1161 . Depending upon the results of that analysis, the restrictive covenant may be disregarded or given complete or partial enforcement to the extent reasonable under the circumstances.

Although post-employment restrictive covenants are not viewed with favor, if under the circumstances a factual determination is made that the covenant protects the legitimate interests of the hospital, imposes no undue hardship on the physician and is not injurious to the public, it may be enforced as written or, if appropriate, as reduced in scope. Here, except for the geographic scope of coverage, the restrictive covenant was fair. Considerations of the potential adverse impact on the public dictate that the geographic scope must be reduced. Because the two-year period for the restrictive covenant has expired, JFK's request for injunctive relief is moot. JFK's claim is limited to damages, including but not limited to the loss of patients, as a result of Dr. More's departure. The judgment of the Appellate Division is affirmed in part and reversed in part. We remand to the Chancery Division for further proceedings consistent with this opinion.

JFK, like every other employer, however, does not have a legitimate business interest in restricting competition.

We conclude, however, that under the circumstances of this case the geographic restrictive area is excessive and must be reduced to avoid being detrimental to the public interest.

When it is reasonable to do so, courts should not hesitate to partially enforce a restrictive covenant. Karlin, supra, 77 N.J. at 420 n. 4, 390 A. 2d 1161 . Somerset is located approximately thirteen miles from JFK and therefore is included in the restricted area. We are satisfied that if the covenant were limited to a distance less than thirteen miles so that Somerset was not within the restricted area, the covenant would not have the same adverse impact on the public that it presently has. A remand is necessary for the Chancery Division to determine the precise limits of the geographic area of the restriction, but in no event should it exceed thirteen miles or include Somerset.

Those legitimate interests may include: (1) protecting confidential business information, including patient lists; (2) protecting patient and patient referral bases; and (3) protecting investment in the training of a physician.

b. The written agreement required under this section shall not be construed to waive the protections of domestic workers under federal, State, and local laws and shall not contain any: (1) Mandatory pre-dispute arbitration agreement for claims made by a covered domestic worker against a domestic work hiring entity regarding the local rights of the worker; and (2) Non-disclosure agreement, or non-competition or non-disparagement agreement, limiting the ability of the covered domestic worker to seek compensation for performing domestic services after the worker ceases to receive compensation from the domestic work hiring entity for the performance of domestic services.

“Restrictive covenant” means an agreement between the board of trustees of a charter school and an employee of the charter school arising out of an existing or anticipated employment relationship, or an agreement between the board and an employee with respect to severance pay, under which the employee or expected employee agrees not to engage in certain specified activities competitive with the charter school after the employment relationship has ended. b. The board of trustees of a charter school, or any employee acting on behalf of the board, shall not require or request that an employee enter into a non-disclosure agreement or restrictive covenant as a condition of employment or with respect to severance pay as provided in an employment contract.

Remanded to the Chancery Division for further proceedings in conformity with this opinion.

13. a. No hiring entity shall employ or engage a domestic worker, except for casual work or work of less than five hours per month, unless the engagement is governed by a written contract governing the following:

c. Nothing in this section shall be construed to prohibit a board of trustees from entering into a non-disparagement agreement with an employee.

c. Notwithstanding any other provision of law to the contrary, this section shall not be construed to prohibit an employer from requiring an employee to sign an agreement: (1) in which the employee agrees not to enter into competition with the employer during or after employment;

The modern, prevailing common-law standard of reasonableness for employee agreements not to compete applies a three-pronged test. A restraint is reasonable only if it: (1) is no greater than is required for the protection of the legitimate interest of the employer, (2) does not impose undue hardship *389 on. the employee, and (3) is not injurious to the public (see, e.g., Technical Aid Corp. v Allen, 134 NH 1, 8, 591 A2d 262, 265-266 ; Blake, op. cit., at 648-649; Restatement [Second] of Contracts § 188). A violation of any prong renders the covenant invalid. New York has adopted this prevailing standard of reasonableness in determining the validity of employee agreements not to compete. “In this context a restrictive covenant will only be subject to specific enforcement to the extent that it is reasonable in time and area, necessary to protect the employer’s legitimate interests, not harmful to the general public and not unreasonably burdensome to the employee” (Reed, Roberts Assocs. v Strauman, 40 NY2d 303, 307 ). In general, we have strictly applied the rule to limit enforcement of broad restraints on competition.

Thus, in Reed, Roberts Assocs. (supra), we limited the cognizable employer interests under the first prong of the common-law rule to the protection against misappropriation of the employer’s trade secrets or of confidential customer lists, or protection from competition by a former employee whose services are unique or extraordinary ( 40 NY2d, at 308 ). With agreements not to compete between professionals, however, we have given greater weight to the interests of the employer in restricting competition within a confined geographical area.

Nonetheless, Gelder Medical Group and Karpinski do not dictate the result here. As we noted in Karpinski , the application of the test of reasonableness of employee restrictive covenants focuses on the particular facts and circumstances giving context to the agreement ( 28 NY2d, at 49 ; see also, Reed, Roberts Assocs. v Strauman, supra, 40 NY2d, at 307 ). This Court’s rationale for giving wider latitude to covenants between members of a learned profession because their services are unique or extraordinary (Reed, Roberts Assocs. v Strauman, supra) does not realistically apply to the actual context of the anti-competitive agreement here.

Legal scholars and courts have more circumspectly identified the employer’s legitimate interest in employee anti-competitive agreements than that of preservation of the employer’s entire client base where, as here, there is no evidence that the employee obtained a competitive advantage by using confidential information.

It follows from the foregoing that EDO’s legitimate interest here is protection against defendant’s competitive use of client relationships which EDO enabled him to acquire through his performance of accounting services for the firm’s clientele during the course of his employment (Blake, op. cit., at 647-661). Extending the anti-competitive covenant to EDO’s clients with whom a relationship with defendant did not develop through assignments to perform direct, substantive accounting services would, therefore, violate the first prong of the common-law rule: it would constitute a restraint “greater than is needed to protect” these legitimate interests (Restatement [Second] of Contracts § 188 [1] [a]).

A legitimate consideration against the exercise of this power is the fear that employers will use their superior bargaining position to impose unreasonable anti-competitive restrictions, uninhibited by the risk that a court will void the entire agreement, leaving the employee free of any restraint (id.). The prevailing, modern view rejects a per se rule that invalidates entirely any overbroad employee agreement not to compete. Instead, when, as here, the unenforceable portion is not an essential part of the agreed exchange, a court should conduct a case specific analysis, focusing on the conduct of the employer in imposing the terms of the agreement (see, Restatement [Second] of Contracts § 184). Under this approach, if the employer demonstrates an absence of overreaching, coercive use of dominant bargaining power, or other anti-competitive misconduct, but has in good faith sought to protect a legitimate business interest, consistent with reasonable standards of fair dealing, partial enforcement may be justified (see, Blake, op. cit, at 633; Restatement [Second] of Contracts § 184 [1], [2]). We essentially adopted this more flexible position in Karpinski (supra).

To the extent, then, that paragraph sixth of the Manager’s Agreement requires defendant to compensate EDO for lost patronage of clients with whom he never acquired a relationship through the direct provision of substantive accounting services during his employment, the covenant is invalid and unenforceable. By a parity of reasoning, it would be unreasonable to extend the covenant to personal clients of defendant who came to the firm solely to avail themselves of his services and only as a result of his own independent recruitment efforts, which BDO neither subsidized nor otherwise financially supported as part of a program of client development.

A different result might obtain had BDO submitted any proof that defendant had used confidential firm information to attract BDO clients with whom he had not had a relationship while employed there.

The Appellate Division’s fear that partial enforcement will require rewriting the parties’ agreement is unfounded. No additional substantive terms are required. The time and geographical limitations on the covenant remain intact. The only change is to narrow the class of BDO clients to which the covenant applies (cf.,Karpinski v Ingrasci, supra [narrowing the scope of the prohibitive post-employment activity]). Moreover, to reject partial enforcement based solely on the extent of necessary revision of the contract resembles the now-discredited doctrine that invalidation of an entire restrictive covenant is required unless the invalid portion was so divisible that it could be mechanically severed, as with a “judicial blue pencil” (see, Blake, op. cit., at 681). The Restatement (Second) of Contracts rejected that rigid requirement of strict divisibility before a covenant could be partially enforced (see, Reporter’s Note, Restatement [Second] of Contracts § 184, at 32). Thus, we conclude that severance is appropriate, rendering the restrictive covenant partially enforceable.

Here, the undisputed facts and circumstances militate in favor of partial enforcement. The covenant was not imposed as a condition of defendant’s initial employment, or even his continued employment, but in connection with promotion to a position of responsibility and trust just one step below admittance to the partnership. There is no evidence of coercion or that the Manager’s Agreement was part of some general plan to forestall competition.

Except for the overbreadth in the foregoing two respects, the restrictions in paragraph sixth do not violate the tripartite common-law test for reasonableness. The restraint on serving EDO clients is limited to 18 months, and to clients of BDO’s Buffalo office. The time constraint appears to represent a reasonably brief interlude to enable the firm to replace the client relationship and goodwill defendant was permitted to acquire with some of its clients.

§ 466. Unreasonable restrictions. 1. It shall be unlawful for a franchisor directly or indirectly to impose unreasonable restrictions on the franchised motor vehicle dealer relative to transfer, sale, right to renew or termination of a franchise, discipline, noncompetition covenants, site-control (whether by sublease, collateral pledge of lease or otherwise), right of first refusal to purchase, option to purchase, compliance with subjective standards and assertion of legal or equitable rights with respect to its franchise or dealership.

The central issue before us is whether the “reimbursement clause” in an agreement between the parties, requiring defendant to compensate BDO for serving any client of the firm’s Buffalo office within 18 months after the termination of his employment, is an invalid and unenforceable restrictive covenant. The courts below so held.

Concededly, the Manager’s Agreement defendant signed does not prevent him from competing for new clients, nor does it expressly bar him from serving BDO clients.

Nonetheless, it is not seriously disputed that the agreement, in its purpose and effect, is a form of ancillary employee anti-competitive agreement that will be carefully scrutinized by the courts (see, Columbia Ribbon & Carbon Mfg. Co. v A-1-A Corp., 42 NY2d 496, 499 ).

Close analysis of paragraph sixth of the agreement under the first prong of the common-law rule, to identify the legitimate interest of BDO and determine whether the covenant is no more restrictive than is necessary to protect that interest, leads us to conclude that the covenant as written is overbroad in some respects.

Defendant is free to compete immediately for new business in any market and, if the over-broad provisions of the covenant are struck, to retain his personal clients and those clients of EDO’s that he had not served to any significant extent while employed at the firm. He has averred that BDO’s list of lost accounts contains a number of clients in both categories. Thus, there is scant evidence suggesting that the covenant, if cured of overbreadth, would work an undue hardship on defendant. Moreover, given the likely broad array of accounting services available in the greater Buffalo area, and the limited remaining class of BDO clientele affected by the covenant, it cannot be said that the restraint, as narrowed, would seriously impinge on the availability of accounting services in the Buffalo area from which the public may draw, or cause any significant dislocation in the market or create a monopoly in accounting services in that locale. These factors militate against *394 a conclusion that a reformed paragraph sixth would violate the third prong of the common-law test, injury to the public interest (see, Gelder Med. Group v Webber, supra, 41 NY2d, at 685; Blake, op. cit., at 686-687; Restatement [Second] of Contracts § 188, comment g).

We conclude that the Appellate Division erred in holding that the entire covenant must be invalidated, and in declining partially to enforce the covenant to the extent necessary to protect BDO’s legitimate interest.

Moreover, no proof was submitted that EDO imposed the covenant in bad faith, knowing full well that it was overbroad. Indeed, as already discussed, the existence of our “learned profession” precedents, and decisions in other States upholding the full terms of this type of agreement, support the contrary conclusion. Therefore, partial enforcement of paragraph sixth is warranted.

As to those clients, the measure of plaintiffs damages will depend in the first instance on the validity of the clause in *396 paragraph sixth of the Manager’s Agreement requiring defendant to compensate BDO “for the loss and damages suffered” in an amount equal to 1½ times the fees charged each lost client over the last full year the client was served by the firm. This provision essentially represents a liquidated damages clause, as BDO conceded at nisi prius. Liquidated damages provisions, under our precedents, are valid if the “damages flowing from a breach are difficult to ascertain [and under] a provision fixing the damages in advance * * * the amount is a reasonable measure of the anticipated probable harm” (City of Rye v Public Serv. Mut. Ins. Co., 34 NY2d 470, 473 ). On the other hand, if “the amount fixed is plainly or grossly disproportionate to the probable loss, the provision calls for a penalty and will not be enforced” (Truck Rent-A-Ctr. v Puritan Farms 2nd, 41 NY2d 420, 425 ). The damages here are sufficiently difficult to ascertain to satisfy the first requirement of a valid liquidated damages provision.

In our view, however, the averment regarding the basis of the liquidated damages formula by no means conclusively *397 demonstrates the absence of gross disproportionality. Indeed, the nonspecific averment in the affidavit, quoted above, which EDO relies upon, is the only record evidence supporting the reasonableness of the liquidated damages clause.

The sparse proof on this issue here persuades us that we, similarly, should remit for further development of the record on the liquidated damages formula.

Accordingly, the order of the Appellate Division, insofar as appealed from, should be modified, without costs, by denying defendant’s motion for summary judgment, granting plaintiffs motion for partial summary judgment declaring the restrictive covenant enforceable as here provided, and remitting to Supreme Court for further proceedings in accordance with this opinion and, as so modified, affirmed.

This claim brings to the Court a question as to whether damages may be awarded in an action on a covenant not to compete contained in an employment contract. Such covenants are enforceable in this state if they are (1) in writing, (2) made part of a contract of employment, (3) based on valuable consideration, (4) reasonable both as to time and territory, and (5) not against public policy. United Laboratories, Inc. v. Kuykendall, 322 N.C. 643 , 370 S.E. 2d 375 (1988).

When the relationship of employer and employee is established before the covenant not to compete is signed there must be consideration for the covenant such as a raise in pay or a new job assignment. Chemical Corp. v. Freeman, 261 N.C. 780 , 136 S.E. 2d 118 (1964); Greene Co. v. Kelley, 261 N.C. 166 , 134 S.E. 2d 166 (1964); Kadis v. Britt, 224 N.C. 154 , 29 S.E. 2d 543 (1944). In this case the plaintiffs evidence showed that prior to 4 March 1976 Connie Daniel had been employed as a part-time secretary and part-time salesperson. On that day she was promoted to full-time salesperson and received a substantial raise in salary. This supports a finding by the jury that the parties entered into a new contract supported by adequate consideration with an ancillary covenant by the employee not to compete. The defendants rely on Collier Cobb and Assoc. v. Leak, 61 N.C. App. 249 , 300 S.E. 2d 583 (1983), disc. rev. denied, 308 N.C. *528 543, 304 S.E. 2d 236 (1983); Mastrom, Inc. v. Warren, 18 N.C. App. 199 , 196 S.E. 2d 528 (1973); and Wilmar, Inc. v. Liles, 13 N.C. App. 71 , 185 S.E. 2d 278 (1971), cert. denied, 280 N.C. 305 , 186 S.E. 2d 178 (1972), to argue that there was no consideration for the covenant in this case. Each of those cases is distinguishable from this case. In each of them the employee had been working for some time before the noncompetition covenant was signed. In none of them was the job of the employee changed at the time the agreement not to compete was signed. In Collier Cobb there was not an increase in compensation and in the other two cases the Court held the promises of additional compensation were so illusory that they were not consideration which would support a promise.

If a contract by an employee in restraint of competition is too broad to be a reasonable protection to the employer’s business it will not be enforced. The courts will not rewrite a contract if it is too broad but will simply not enforce it. Paper Co. v. McAllister, 253 N.C. 529 , 117 S.E. 2d 431 ; Noe v. McDevitt, 228 N.C. 242 , 45 S.E. 2d 121 (1947). If the contract is separable, however, and one part is reasonable, the courts will enforce the reasonable provision. Welcome Wagon, Inc. v. Pender, 255 N.C. 244 , 120 S.E. 2d 739 (1961). In this case the plaintiff has not attempted to enforce the provision of the contract which forbids Connie Daniel from engaging in manufacturing. That provision is not before us. We hold that the part which is before us is separable and may be enforced by the award of damages.

This Court will enforce a covenant not to compete made in connection with the sale of a business “(1) if it is reasonably necessary to protect the legitimate interest of the purchaser; (2) if it is reasonable with respect to both time and territory; and (3) if it does not interfere with the interest of the public.” Jewel Box Stores Corp. v. Morrow, 272 N.C. 659, 662-63, 158 S.E.2d 840, 843 (1968) (citations omitted).

Allowing litigants to assign to the court their drafting duties as parties to a contract would put the court in the role of scrivener, making judges postulate new terms that the court hopes the parties would have agreed to be reasonable at the time the covenant was executed or would find reasonable after the court rewrote the limitation. We see nothing but mischief in allowing such a procedure.

The trial court in this case declined to enforce a covenant not to compete, even though the parties expressly agreed in their contract that a court could rewrite overbroad temporal and territorial limitations that would otherwise render the covenant unenforceable.

The trial court correctly allowed defendants’ motion for summary judgment as to all claims. Accordingly, we reverse the decision of the Court of Appeals. REVERSED.

To avoid this injustice, North Carolina courts will only blue-pencil an unreasonable covenant that is “separable” or “divisible” from the reasonable, enforceable covenant. Whittaker Gen. Med. Corp., 324 N.C. at 528; Beverage Sys. of the Carolinas, 368 N.C. at 696. Only those separable or divisible covenants may be fairly stricken out.

North Carolina’s strict application of the doctrine stems from our traditional contract law rule that “[t]he courts will not rewrite a contract if it is too broad but will simply not enforce it.” Whittaker Gen. Med. Corp., 324 N.C. at 528.

The provision sought to be removed must be separable or divisible from the provision sought to be enforced. Since plaintiffs do not request blue- penciling of a separable, divisible provision from an otherwise enforceable provision, blue-penciling cannot apply. We remand the Non-Solicitation Provisions as they are written.

No contract or agreement hereafter made, limiting the rights of any person to do business anywhere in the State of North Carolina shall be enforceable unless such agreement is in writing duly signed by the party who agrees not to enter into any such business within such territory:

Provided, nothing herein shall be construed to legalize any contract or agreement not to enter into business in the State of North Carolina, or at any point in the State of North Carolina, which contract is now illegal, or which contract is made illegal by any other section of this Chapter.

Finally, plaintiff argues that the parties gave the trial court the power under paragraph six of the Agreement to revise its territorial limits to make them reasonable. However, parties cannot contract to give a court power that it does not have.

The Agreement’s territorial limits cannot be blue-penciled unless the Agreement can be interpreted so that it sets out both reasonable and unreasonable restricted territories. Id. at 248, 120 S.E.2d at 742. We found above that the restrictions to all of North Carolina and South Carolina, the only territorial restrictions in the Agreement, are unreasonable. Striking the unreasonable portions leaves no territory left within which to enforce the covenant not to compete. As a result, blue-penciling cannot save the Agreement.

As discussed above, blue-penciling is the process by which “a court of equity will take notice of the divisions the parties themselves have made [in a covenant not to compete], and enforce the restrictions in the territorial divisions deemed reasonable and refuse to enforce them in the divisions deemed unreasonable.” Welcome Wagon, 255 N.C. at 248, 120 S.E.2d at 742 (majority opinion).

A contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind is to that extent void, except:

A person that sells the goodwill of a business and the person's partners, members, or shareholders may agree with the buyer to refrain from carrying on a similar business within a reasonable geographic area and for a reasonable length of time, if the buyer or any person deriving title to the goodwill from the buyer carries on a like business in that area.

Partners, members, or shareholders, upon or in anticipation of a dissolution of a partnership, limited liability company, or corporation; upon or in anticipation of a dissociation of a partner or member; or as part of an agreement addressing the dissociation or sale of a partner, member, or shareholder's ownership interest, may agree that all or any number of them will not carry on a similar business within a reasonable geographic area where the partnership, limited liability company, or corporation business has been transacted, or within a specified part of the area.

The activity prohibited in Paragraph 6(a) of the agreement Solberg signed is any “attempt to affect the discontinuance” of any of Warner’s existing insurance business.

We hold a portion of the contract does violate N.D.C.C. § 9-08-06 and there are genuine issues of material fact precluding summary judgment with respect to the remaining portions of the contract. We affirm the judgment in part, reverse the judgment in part, and remand for further proceedings.

Recognizing this Court has applied N.D.C.C. § 9-08-06 to invalidate clauses in employment agreements that absolutely bar an employee from competing with a former employer or working for a competitor, the United States Court of Appeals for the Eighth Circuit, applying *71 North Dakota law, concluded less burdensome restrictions may survive.

Because of the plain language of the statute, the history of legislation in North Dakota concerning this issue, and because North Dakota has enacted trade-secrets legislation, we decline to do so.

Section 9-08-06, N.D.C.C., declares contracts that constitute a restraint of business are void, with two exceptions: Every contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind is to that extent void, except: 1. One who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business within a specified county, city, or a part of either, so long as the buyer or any person deriving title to the goodwill from him carries on a like business therein. 2. Partners, upon or in anticipation of a dissolution of the partnership, may agree that all or any number of them will not carry on a similar business within the same city where the partnership business has been transacted, or within a specified part thereof.

In contrast, Paragraph 6(a) of the contract between Warner and Solberg limits agents from leaving one agency and converting the same policies of the same customers to a new agency. Nevertheless, Paragraph 6(a), although more narrowly drawn than those in Werlinger, Spectrum and Olson , nevertheless does not escape the broad prohibition in N.D.C.C. § 9-08-06, nor does the provision fall within the two exceptions allowed by that statute.

These limitations constitute a restraint of trade and therefore the agreement is “to that extent void.” N.D.C.C. § 9-08-06. See Hawkins Chemical, Inc. v. McNea, 321 N.W.2d 918, 920 (N.D.1982) (stating “it is well settled that if an unreasonable restraining clause can be separated leaving a reasonable agreement, it is valid to do so”).

Paragraph 6(c) prohibits Solberg from soliciting or seeking to influence any employee of Warner to become the employee of Vaaler. This prohibition is narrowly drawn to penalize only Solberg’s actions of soliciting or influencing an employee to leave Warner and come to work for Vaaler and is not void as a restraint of trade.

Solberg’s sale of stock can constitute a sale of goodwill qualifying for the exception. Ordinarily, it is a question of fact whether the sale of stock was sufficiently connected to the agreement. Although the sale of stock can be less than a majority interest to qualify as a sale of goodwill sufficient for the exception, it is ordinarily a question of fact whether the sale of stock was sufficient to constitute a sale of goodwill. We believe the sale of only a small amount of stock may not be sufficient to qualify for the goodwill exception to N.D.C.C. § 9-08-06.

Solberg sold 500 of the 100,000 shares of stock issued in Warner. We agree with the trial court that, as a matter of law, the sale of a l/200th interest cannot be said to transfer the goodwill of the business.

We hold that a covenant not to compete which imposes unreasonable restrictions upon an employee will be enforced to the *26 extent necessary to protect the employer’s legitimate interests. A covenant restraining an employee from competing with his former employer upon termination of employment is reasonable if it is no greater than is required for the protection of the employer, does not impose undue hardship on the employee, and is not injurious to the public. Courts are empowered to modify or amend employment agreements to achieve such results.

The “blue pencil” test provides that if unreasonable provisions exist in such, a contract, they may be stricken, if divisible, but not amended or modified. It also provides that if restrictions are unreasonable and indivisible, the entire contract fails.

Appellee argues that adoption of a rule of reasonableness would allow employers to dictate restraints without fear, knowing that judges will rewrite contracts if they are taken to court. Such a contention is without merit.

Among the factors properly to be considered are: “ [t]he absence or presence of limitations as to time and space, * * * whether the employee represents the sole contact with the customer; whether the employee is possessed with confidential information or trade secrets; whether the covenant seeks to eliminate competition which would be unfair to the employer or merely seeks to eliminate ordinary competition: whether the covenant seeks to stifle the inherent skill and experience of the employee; whether the benefit to the employer is disproportional to the detriment to the employee; whether the covenant operates as a bar to the employee’s sole means of support; whether the employee’s talent which the employer seeks to suppress was actually developed' during the period of employment; and whether the forbidden employment is merely incidental to the main employment.” Extine, supra, at 406.

Thus, many courts 1 have abandoned the “blue pencil” *25 test in favor of a rule of “reasonableness,” which permits courts to determine, on the basis of all available evidence, what restrictions would be reasonable between the parties.

“In determining the validity of a convenant or agreement in restraint of trade, each case must be decided on its own facts * * #.” Extine, supra, at 403.

A noncompetition agreement entered into between an employer and employee is void and unenforceable unless: (a)(A) The employer informs the employee in a written employment offer received by the employee at least two weeks before the first day of the employee’s employment that a noncompetition agreement is required as a condition of employment; or (B) The noncompetition agreement is entered into upon a subsequent bona fide advancement of the employee by the employer; (b) The employee is a person described in ORS 653.020 (3); (c) The employer has a protectable interest as described in subsection (2) of this section; (d) Within 30 days after the date of the termination of the employee’s employment, the employer provides a signed, written copy of the terms of the noncompetition agreement to the employee; and (e) The total amount of the employee’s annual gross salary and commissions, calculated on an annual basis, at the time of the employee’s termination exceeds $100,533, adjusted annually for inflation pursuant to the Consumer Price Index for All Urban Consumers, West Region (All Items), as published by the Bureau of Labor Statistics of the United States Department of Labor immediately preceding the calendar year of the employee’s termination. This paragraph does not apply to an employee described in subsection (2)(c) of this section.

For purposes of subsection (1)(c) of this section, an employer has a protectable interest when the employee: (a) Has access to trade secrets, as defined in ORS 646.461; (b) Has access to competitively sensitive confidential business or professional information that otherwise would not qualify as a trade secret, including product development plans, product launch plans, marketing strategy or sales plans; or (c) Is employed as an on-air talent by an employer in the business of broadcasting and the employer: (A) In the year preceding the termination of the employee’s employment, expended resources equal to or exceeding 10 percent of the employee’s annual salary to develop, improve, train or publicly promote the employee, provided that the resources expended by the employer were expended on media that the employer does not own or control; and (B) Provides the employee, for the time the employee is restricted from working, the greater of compensation equal to at least: (i) Fifty percent of the employee’s annual gross base salary and commissions at the time of the employee’s termination; or (ii) Fifty percent of $100,533, adjusted annually for inflation pursuant to the Consumer Price Index for All Urban Consumers, West Region (All Items), as published by the Bureau of Labor Statistics of the United States Department of Labor immediately preceding the calendar year of the employee’s termination.

The term of a noncompetition agreement may not exceed 12 months from the date of the employee’s termination. The remainder of a term of a noncompetition agreement in excess of 12 months is void and may not be enforced by a court of this state. (4) Subsections (1) and (3) of this section apply only to noncompetition agreements made in the context of an employment relationship or contract and not otherwise. (5) Subsections (1) and (3) of this section do not apply to: (a) Bonus restriction agreements, which are lawful agreements that may be enforced by the courts in this state; or (b) A covenant not to solicit employees of the employer or solicit or transact business with customers of the employer.

Nothing in this section restricts the right of any person to protect trade secrets or other proprietary information by injunction or any other lawful means under other applicable laws.

Notwithstanding subsection (1)(b) and (e) of this section, a noncompetition agreement is enforceable for the full term of the agreement, for up to 12 months, if the employer agrees in writing to provide the employee, for the time the employee is restricted from working, the greater of: (a) Compensation equal to at least 50 percent of the employee’s annual gross base salary and commissions at the time of the employee’s termination; or (b) Fifty percent of $100,533, adjusted annually for inflation pursuant to the Consumer Price Index for All Urban Consumers, West Region (All Items), as published by the Bureau of Labor Statistics of the United States Department of Labor immediately preceding the calendar year of the employee’s termination.

(3) An individual engaged in administrative, executive or professional work who: (a) Performs predominantly intellectual, managerial or creative tasks; (b) Exercises discretion and independent judgment; and (c) Earns a salary and is paid on a salary basis.

“Bonus restriction agreement” means an agreement, written or oral, express or implied, between an employer and employee under which: (A) Competition by the employee with the employer is limited or restrained after termination of employment, but the restraint is limited to a period of time, a geographic area and specified activities, all of which are reasonable in relation to the services described in subparagraph (B) of this paragraph; (B) The services performed by the employee pursuant to the agreement include substantial involvement in management of the employer’s business, personal contact with customers, knowledge of customer requirements related to the employer’s business or knowledge of trade secrets or other proprietary information of the employer; and (C) The penalty imposed on the employee for competition against the employer is limited to forfeiture of profit sharing or other bonus compensation that has not yet been paid to the employee.

“Noncompetition agreement” means a written agreement between an employer and employee under which the employee agrees that the employee, either alone or as an employee of another person, will not compete with the employer in providing products, processes or services that are similar to the employer’s products, processes or services for a period of time or within a specified geographic area after termination of employment.

A noncompetition agreement shall not be enforceable against the following types of workers: (1) An employee who is classified as nonexempt under the Fair Labor Standards Act, 29 U.S.C. §§ 201-219;

Undergraduate or graduate students who participate in an internship or otherwise enter a short-term employment relationship with an employer, whether paid or unpaid, while enrolled at an educational institution; (3) Employees age eighteen (18) or younger; or (4) A low-wage employee.

This section does not render void or unenforceable the remainder of a contract or agreement containing the unenforceable noncompetition agreement, nor does it preclude the imposition of a noncompetition restriction by a court, whether through preliminary or permanent injunctive relief or otherwise, as a remedy for a breach of another agreement or of a statutory or common law duty.

“Low-wage employee” means an employee whose average annual earnings, as defined in subsection (2), are not more than two hundred fifty percent (250%) of the federal poverty level for individuals as established by the United States Department of Health and Human Services federal poverty guidelines.

“Earnings” means wages or compensation paid to an employee in the first forty (40) hours of work in a given week, not inclusive of hours paid at an overtime, Sunday, or holiday rate.

Noncompetition agreements include forfeiture for competition agreements, but do not include: (i) Covenants not to solicit or hire employees of the employer; (ii) Covenants not to solicit or transact business with customers, clients, or vendors of the employer;

Noncompetition agreements made in connection with the cessation of or separation from employment if the employee is expressly granted seven (7) business days to rescind acceptance; or

Any contract or agreement that creates or establishes the terms of a partnership, employment, or any other form of professional relationship with a physician licensed to practice medicine pursuant to this chapter that includes any restriction of the right of such physician to practice medicine shall be void and unenforceable with respect to said restriction

Notwithstanding the foregoing, the prohibition on advanced practice registered nurse covenants shall not apply in connection with the purchase and sale of a practice; provided the restrictive covenant and non-compete covenant is for a period of time of not more than five (5) years.

However, since such provisions are not favored, they are subject to judicial scrutiny and will be enforced as written only if the contract is reasonable and does not extend beyond what is apparently necessary for the protection of those in whose favor it runs.

We believe this is the appropriate time to choose the route that permits unreasonable restraints to be modified and enforced, whether or not their terms are divisible, unless the circumstances indicate bad faith or deliberate overreaching on the part of the promisee.

Even under this approach a court will go no further in granting relief than is reasonably necessary to protect a promisee’s legitimate interests.

It is well settled that covenants not to compete are disfavored and subject to strict judicial scrutiny.

Although such broad restraints are not unenforceable per se, courts should uphold them only to the extent they are necessary to protect the promisee’s legitimate interests.

Generally, this Court disfavors the enforcement of covenants not to compete and subjects these contractual provisions to rigorous judicial scrutiny.

we will refuse to enforce covenants not to compete unless the litigant seeking their enforcement demonstrates that the contractual provision is ancillary to an otherwise valid transaction or employment relationship, that the contract is reasonable, and that it does not extend beyond what is apparently necessary to protect the party receiving the provision’s benefit.

In consideration for continued employment with plaintiff, as well as plaintiff’s promise to train and qualify Mr. Walls as a licensed exterminator in Rhode Island, Mr. Walls agreed not to solicit business from, or perform pest-control services for, any of plaintiff’s current or former clients for a period of twenty-four months.

Specifically, it limits its prohibition to a twenty-four- month period, and extends only to plaintiff’s current and previous clients, rather than to a geographic area. This Court has previously upheld similar, more restrictive noncompetition agreements and takes no issue with the language contained in this agreement.

There is no limiting language that conditions applicability on the circumstances of the termination from employment, whether voluntary or involuntary.

Because we conclude that the hearing justice was clearly wrong in his interpretation of the covenants not to compete contained in the settlement agreement, we reverse, vacate the Superior Court judgment and order issuing injunctive and declaratory relief, and remand this case for further proceedings consistent with this opinion.

In light of our remand to the Superior Court for further fact-finding, we need not expressly rale at this time on the overall enforceability of the covenants not to compete that are set forth in the settlement agreement.

Before a court reaches this question, however, the party seeking to enforce a noncompetition provision must show that (1) the provision is ancillary to an otherwise valid transaction or relationship, such as an employment contract or a contract for the purchase and sale of a business, Restatement (Second) Contracts § 187 (1981), (2) the provision is supported by adequate consideration, Wood v. May, 73 Wash.2d 307, 310-11 , 438 P.2d 587, 589-90 (1968); see also Central Adjustment Bureau, Inc. v. Ingram, 678 S.W.2d 28, 33 (Tenn.1984), and (3) there exists a legitimate interest that the provision is designed to protect.

The noncompetition agreement at issue is a product of a lawful, bargained-for exchange based on Mr. Walls’s at-will employment relationship with plaintiff:

This determination has no bearing on the validity of the noncompetition agreement itself.

Noncompetition agreements made in connection with the sale of a business entity or all or substantially all of the operating assets of a business entity or partnership, or otherwise disposing of the ownership interest of a business entity or partnership, or division or subsidiary of any of the foregoing, when the party restricted by the noncompetition agreement is a significant owner of, or member or partner in, the business entity who will receive significant consideration or benefit from the sale or disposal;

Nothing in this section shall preclude an employer from entering into an agreement with an employee not to share any information, including after the employee is no longer employed by the employer, regarding the employer or the employment that is a trade secret.

Notwithstanding the foregoing, the prohibition on physician covenants shall not apply in connection with the purchase and sale of a physician practice, provided the restrictive covenant and/or noncompete covenant is for a period of a time of no more than five (5) years.

Restrictions rendered void under subsection (a) shall include, but shall not be limited to, the following: (1) The right to practice medicine in any geographic area for any period of time after the termination of such partnership, employment, or professional relationship; and (2) The right of such physician to provide treatment, advise, consult with, or establish a physician/patient relationship with any current patient of the employer; and (3) The right of such physician to solicit or seek to establish a physician/patient relationship with any current patient of the employer.

Here American’s only legitimate proprietary rights, the outstanding leases, were not in any way infringed upon by Durapin. Thus there was no need to modify and enforce the-restrictive covenant contained in the American-Durapin agreement. American’s appeal is denied and dismissed. The judgment appealed from is affirmed, and the case is remanded to the Superior Court.

Conclusion Based on the foregoing, we affirm the order of the Superior Court and remand the record in this case.

Indeed, the original order and the judgment declare that paragraph 1 of the settlement agreement is “reasonable and enforceable.” Thus, by declaring paragraph 1 of the settlement agreement to be enforceable — without reference to how paragraph 3 of that same agreement narrows or supersedes its scope — the hearing justice effectively declared that Nikoloff was barred from working with or for any chemical supplier providing prohibited products or services.

Any contract restraining exercise of a lawful profession, trade, or business is void to that extent, except as provided by §§ 53-9-9 to 53-9-12 , inclusive.

an employee may agree with an employer at the time of employment or at any time during employment not to engage directly or indirectly in the same business or profession as that of the employer for any period not exceeding two years from the date of termination of the agreement and not to solicit existing customers of the employer within a specified county, first- or second-class municipality, or other specified area for any period not exceeding two years from the date of termination of the agreement, if the employer continues to carry on a like business therein.

We hold that if an employee voluntarily quits his employment or is fired for good cause, Centrol, Inc. and American Rim & Brake will control and no further showing of reasonableness will be necessary as long as the non-eompete or non-disclosure agreement complies with SDCL 53-9-11.

Notwithstanding § 53-9-11 , a provision of a contract, entered into on or after July 1, 2023, is voidable if it restricts a practitioner, as defined in § 53-9-11.1 , from practicing or otherwise providing professional services in accordance with the applicable scope of practice, after the conclusion of the practitioner's employment or after the dissolution of a partnership or other form of professional relationship.

Notwithstanding § 53-9-11 , a provision of a contract, entered into on or after July 1, 2026, is voidable if it restricts a community services provider, as defined in § 27B-1-17 , from employment in or otherwise providing services to individuals with developmental disabilities

For purposes of § 53-9-11.2 , a practitioner means: (1) A physician licensed in accordance with chapter 36-4 ; (2) A physician assistant licensed in accordance with chapter 36-4A ;

However, if an employee is fired for no fault of his own, the court needs to go further to determine whether the agreement is reasonable.

(1) A promise to refrain from competition that imposes a restraint that is ancillary to an otherwise valid transaction or relationship is unreasonably in restraint of trade if (a) the restraint is greater than is needed to protect the promisee’s legitimate interest, or (b) the promisee’s need is outweighed by the hardship to the promisor and the likely injury to the public.

The reasonableness of each provision is the benchmark for partial enforcement of the instant covenants. “[A] covenant is reasonable only if it (1) is no greater than is required for the protection of the employer, (2) does not impose undue hardship on the employee and (3) is not injurious to the public.” This test is then applied to the duration, area limitations, and range of activities covered in the agreement, (citations omitted).

The trial court’s grant of an injunction restraining Zakinski from violating the confidentiality (non-disclosure) portion of the agreement is affirmed. However, the portion of the injunction restraining him from working for any of Central’s competitors in South Dakota for a period of two years is reversed and remanded to the trial court to analyze and balance the competing interests of Central, Zakinski and the public to determine whether the non-compete portion of the agreement is reasonable.

The otherwise enforceable agreement must give rise to the "interest worthy of protection" by the covenant not to compete. DeSantis v. Wackenhut Corp., 793 S.W.2d 670, 682 (Tex. 1990) (citing § 187 comment b of the Restatement and noting that business goodwill and confidential or proprietary information are examples of such worthy interests). Therefore, in order for a covenant not to compete to be ancillary to an otherwise enforceable agreement between employer and employee: (1) the consideration given by the employer in the otherwise enforceable agreement must give rise to the employer's interest in restraining the employee from competing; and (2) the covenant must be designed to enforce the employee's consideration or return promise in the otherwise enforceable agreement. [14] Unless both elements of the test are satisfied, the covenant cannot be ancillary to or a part of an otherwise enforceable agreement, and is therefore a naked restraint of trade and unenforceable.

Consideration for a noncompete that is reasonably related to an interest worthy of protection, such as trade secrets, confidential information or goodwill, satisfies the statutory nexus; and there is no textual basis for excluding the protection of much of goodwill from the business interests that a noncompete may protect.

In Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding , we took another step *775 away from Light 's restrictiveness and toward greater enforceability of noncompete agreements. 289 S.W.3d 844 (Tex.2009). The employer did not expressly promise to provide the employee with confidential information, but the employee's position mandated such information be provided. Id. at 850 . The employee promised not to disclose confidential information obtained. Id. We held that "[w]hen the nature of the work the employee is hired to perform requires confidential information to be provided... the employer impliedly promises confidential information will be provided

we hold that a covenant not to compete is not unenforceable under the Covenants Not to Compete Act solely because the employer's promise is executory when made. If the agreement becomes enforceable after the agreement is made because the employer performs his promise under the agreement and a unilateral contract is formed, the covenant is enforceable if all other requirements under the Act are met.

(a) Notwithstanding Section 15.05 and subject to any applicable provision of Subsection (b) and Section 15.501 , a covenant not to compete is enforceable if it is ancillary to or part of an otherwise enforceable agreement at the time the agreement is made to the extent that it contains limitations as to time, geographical area, and scope of activity to be restrained that are reasonable and do not impose a greater restraint than is necessary to protect the goodwill or other business interest of the promisee.

The criteria for enforceability of a covenant not to compete provided by Sections 15.50 and 15.501 and the procedures and remedies in an action to enforce a covenant not to compete provided by Section 15.51 are exclusive and preempt other law, including common law.

(2) the covenant must provide for a buyout of the covenant by the physician in an amount that is not greater than the physician's total annual salary and wages at the time of termination of the contract or employment; (3) the covenant must provide that the physician will not be prohibited from providing continuing care and treatment to a specific patient or patients during the course of an acute illness even after the contract or employment has been terminated; and

(4) the covenant must: (A) expire not later than the one-year anniversary of the date the contract or employment has been terminated; (B) limit the geographical area subject to the covenant to no more than a five-mile radius from the location at which the physician primarily practiced before the contract or employment terminated; and (C) have terms and conditions clearly and conspicuously stated in writing.

(a) In this section, "health care practitioner" means: (1) a person licensed by the State Board of Dental Examiners to practice dentistry in this state; (2) a person licensed under Chapter 301 , Occupations Code, to engage in professional or vocational nursing; or (3) a physician assistant licensed under Chapter 204 , Occupations Code. (b) A covenant not to compete relating to the practice of dentistry or nursing, or practice as a physician assistant, as applicable, is not enforceable against a health care practitioner unless the covenant: (1) provides for a buyout of the covenant by the health care practitioner in an amount that is not greater than the practitioner's total annual salary and wages at the time of termination of the practitioner's contract or employment; (2) expires not later than the one-year anniversary of the date the contract or employment has been terminated; (3) limits the geographical area subject to the covenant to no more than a five-mile radius from the location at which the health care practitioner primarily practiced before the contract or employment terminated; and (4) has terms and conditions that are clearly and conspicuously stated in writing.

The former judicial requirement that the "consideration given by the employer in the otherwise enforceable agreement must give rise to the employer's interest in restraining the employee from competing" is not anchored in the text of the Act. See Light, 883 S.W.2d at 647 . We attempt to construe the Legislature's words.

If the trial court determines that any particular provision is unreasonable or overbroad, the trial court has the authority to reform the Agreement and enforce it by injunction with reasonable limitations.

Under Light, for a covenant to be "ancillary to or part of" an enforceable agreement under section 15.50, "(1) the consideration given by the employer in the otherwise enforceable agreement must give rise to the employer's interest in restraining the employee from competing; and (2) the covenant must be designed to enforce the employee's consideration or return promise in the otherwise enforceable agreement."

a unilateral contract formed when the employer performs a promise that was illusory when made can satisfy the requirements of the Act.

(d) Notwithstanding any other law, a covenant not to compete relating to the practice of medicine is void and unenforceable against a person licensed as a physician by the Texas Medical Board if the physician is involuntarily discharged from contract or employment without good cause. For purposes of this subsection, "good cause" means a reasonable basis for discharge of a physician from contract or employment that is directly related to the physician's conduct, including the physician's conduct on the job or otherwise, job performance, and contract or employment record.

(b) A covenant not to compete relating to the practice of medicine is enforceable against a person licensed as a physician by the Texas Medical Board if such covenant complies with the following requirements: (1) the covenant must: (A) not deny the physician access to a list of the physician's patients whom the physician had seen or treated within one year of termination of the contract or employment; (B) provide access to medical records of the physician's patients upon authorization of the patient and any copies of medical records for a reasonable fee as established by the Texas Medical Board under Section 159.008 , Occupations Code; and (C) provide that any access to a list of patients or to patients' medical records after termination of the contract or employment shall not require such list or records to be provided in a format different than that by which such records are maintained except by mutual consent of the parties to the contract;

(b-1) For the purposes of Subsection (b), the practice of medicine does not include managing or directing medical services in an administrative capacity for a medical practice or other health care provider. (c) Subsection (b) does not apply to a physician's business ownership interest in a licensed hospital or licensed ambulatory surgical center.

Except as provided in Subsection (2) and in addition to any requirements imposed under common law, for a non-compete agreement entered into on or after May 10, 2016, an employer and an employee may not enter into a non-compete agreement for a period of more than one year from the day on which the employee is no longer employed by the employer. On or after May 6, 2026, a person and a healthcare worker may not enter into a healthcare non-compete agreement. A non-compete agreement that violates this Subsection (1) is void.

"Nondisclosure clause" means an agreement, between a person and an individual who works for or with the person, that prevents, or has the effect of preventing, the individual from disclosing or discussing information the individual learned as a result of the individual working for or with the person. "Nonsolicitation agreement" means an agreement, between a person and an individual who works for or with the person, in which the individual agrees that on or after the day on which the individual no longer works for or with the person, the individual will not solicit the person's clients, customers, or employees. "Non-compete agreement" means an agreement, written or oral, between an employer and employee under which the employee agrees that on or after the day on which the employer no longer employs the employee, the employee, either alone or as an employee of another person, will not compete with the employer in providing a product, process, or service that is similar to the employer's product, process, or service. "Non-compete agreement" does not include: a nonsolicitation agreement; a nondisclosure agreement; or a confidentiality agreement. "Sale of a business" means a transfer of the ownership by sale, acquisition, merger, or other method of the tangible or intangible assets of a business entity, or a division or segment of the business entity.

"Healthcare non-compete agreement" means an agreement between a person and a healthcare worker within which the healthcare worker agrees that, after the day on which the healthcare worker no longer works for or with the person, the healthcare worker will not engage in a service that the healthcare worker may provide under the scope of the healthcare worker's license: for a restricted period of time; or within a specific geographic area.

Subject to Subsection (2)(b) , a non-compete agreement between a broadcasting company and a broadcasting employee is valid only if: the broadcasting employee is an exempt broadcasting employee; the non-compete agreement is part of a written employment contract of reasonable duration, based on industry standards, the position, the broadcasting employee's experience, geography, and the parties' unique circumstances; and the broadcasting company terminates the broadcasting employee for cause; or the broadcasting employee breaches the employment contract in a manner that results in the broadcasting employee no longer being employed by the broadcasting company. A non-compete agreement described in Subsection (2)(a) is enforceable for no longer than the earlier of: one year after the day on which the broadcasting employee is no longer employed by the broadcasting company; or the day on which the original term of the employment contract containing the non-compete agreement ends. A non-compete agreement between a broadcasting company and a broadcasting employee that does not comply with this Subsection (2) is void.

Subject to Subsection (3)(b) , on or after May 6, 2026, a person and a veterinarian may not enter into a veterinarian non-compete agreement. Subsection (3)(a) does not apply if the veterinarian has at least a 5% ownership interest in the person's business. A veterinarian non-compete agreement that violates this Subsection (3) is void. If a provision in a veterinarian non-compete agreement entered into on or after May 6, 2026, requires that the parties to a dispute arising under the veterinarian non-compete agreement resolve the dispute in a forum outside of this state, the provision: is void and unenforceable; and is considered against the public policy of this state. Nothing in this section affects an agreement that is not a: non-compete agreement; healthcare non-compete agreement; or veterinarian non-compete agreement.

On or after May 6, 2026, a person and a healthcare worker may not enter into nonsolicitation agreement that prevents a healthcare worker from informing a patient of any of the following: the healthcare worker's current place of employment; or the healthcare worker's future place of employment. A nonsolicitation agreement that violates Subsection (1) is void.

This chapter does not prohibit: a reasonable severance agreement mutually and freely agreed upon in good faith at or after the time of termination that includes a non-compete agreement or a healthcare non-compete agreement; or a non-compete agreement or a healthcare non-compete agreement related to or arising out of the sale of a business, if the individual subject to the non-compete agreement or healthcare non-compete agreement receives value related to the sale of the business. Notwithstanding Subsection (1)(a) , a severance agreement remains subject to any requirements imposed under common law.

If an employer seeks to enforce a non-compete agreement, healthcare non-compete agreement, nondisclosure clause, or nonsolicitation agreement through arbitration or by filing a civil action and it is determined that the non-compete agreement, healthcare non-compete agreement, nondisclosure clause, or nonsolicitation agreement is unenforceable, the employer is liable for the employee's: costs associated with arbitration; attorney fees and court costs; and actual damages.

The four requirements are that (1) the covenant not to compete must be supported by consideration; (2) no bad faith may be shown in the negotiation of the contract; (3) the covenant must be necessary to protect the goodwill of the business; and (4) the covenant must be reasonable in its restrictions in terms of time and geographic area. Allen v. Rose Park Pharmacy, 120 Utah at 619 , 237 P.2d at 828 .

"Healthcare worker" means an individual licensed and practicing as: an advanced practice registered nurse intern under Title 58, Chapter 31b, Nurse Practice Act; an advanced practice registered nurse under Title 58, Chapter 31b, Nurse Practice Act; an advanced practice registered nurse - CRNA without prescriptive practice under Title 58, Chapter 31b, Nurse Practice Act; an associate marriage and family therapist under Section 58-60-304 ; a behavioral health coach under Section 58-60-603 ; a behavioral health technician under Section 58-60-603 ; a certified dietitian as that term is defined in Section 58-49-2 ; a certified psychology resident under Title 58, Chapter 60, Part 4, Clinical Mental Health Counselor Licensing Act; a certified social worker under Title 58, Chapter 60, Part 2, Social Worker Licensing Act; a clinical mental health counselor under Title 58, Chapter 60, Part 4, Clinical Mental Health Counselor Licensing Act; a clinical social worker under Title 58, Chapter 60, Part 2, Social Worker Licensing Act; a dentist as that term is defined in Section 58-69-102 ; a genetic counselor as that term is defined in Section 58-75-102 ; a licensed assistant behavior analyst under Title 58, Chapter 61, Part 7, Behavior Analyst Licensing Act; a licensed behavior analyst under Title 58, Chapter 61, Part 7, Behavior Analyst Licensing Act; a licensed massage therapist as that term is defined in Section 58-47b-102 ; a licensed practical nurse under Title 58, Chapter 31b, Nurse Practice Act; a marriage and family therapist under Section 58-60-304 ; a medication aide certified as that term is defined in Section 58-31b-102 ; a mental health therapist as that term is defined in Section 58-60-102 ; a naturopathic physician as that term is defined in Section 58-71-102 ; a nurse midwife as that term is defined in Section 58-44a-102 ; an optometrist as that term is defined in Section 58-16a-102 ; a physical therapist under Section 58-24b-302 ; a physician as that term is defined in Section 58-68-102 ; a physician assistant as that term is defined in Section 58-70a-102 ; a psychologist under Section 58-61-301 ; a podiatric physician under Section 58-5a-301 ; a radiology practitioner as that term is defined in Section 58-54-102 ; a registered nurse under Title 58, Chapter 31b, Nurse Practice Act; a respiratory care practitioner as that term is defined in Section 58-57-2 ; a social service worker under Title 58, Chapter 60, Part 2, Social Worker Licensing Act; or a substance use disorder counselor under Title 58, Chapter 60, Part 5, Substance Use Disorder Counselor Act. "Healthcare worker" does not include an individual: who holds a license described in Subsection (5)(a)(i) through (xxxiii) ; and whose employment or contractual agreement does not require or involve practicing under the scope of the individual's license.

"Exempt broadcasting employee" means a broadcasting employee who is compensated on a salary basis, as defined in 29 C.F.R. Sec. 541.602, at a rate equal to or greater than the greater of: $913 per week, or an equivalent amount if calculated for a period longer than one week; or the rate at which an employee qualifies as exempt under the Fair Labor Standards Act, 29 U.S.C. Sec. 213(a) on a salary basis as defined in 29 C.F.R. Part 541.

Moreover, the court determined that Kasco had also met the requirements of Robbins v. Finlay, 645 P.2d 623, 627-28 (Utah 1982), which held that not only must the restrictive covenant be necessary to protect the goodwill of the business, but also the employer must show that the services rendered by the employee are special, unique, or extraordinary.

“To be valid and enforceable, a restrictive employment covenant must comply with” four requirements. System Concepts, Inc. v. Dixon, 669 P.2d 421, 425 (Utah 1983). These requirements are: (1) the covenant must “be supported by consideration,” (2) “no bad faith” was involved “in the negotiation of the contract,” (3) the covenant must “be necessary to protect the goodwill of the business,” and (4) the covenant must “be reasonable in its restrictions as to time and area.” Id. at 425–26.

But Soar concedes that the noncompete agreements in question were signed prior to the effective date of this law (May 10, 2016), so this statute does not apply to this case. And we further note that past cases applying Utah common law have routinely approved restrictions of one year or longer.

No employer shall enter into, enforce, or threaten to enforce a covenant not to compete with any low-wage employee or health care professional.

No covenant not to compete between an employer and an employee is enforceable if such employer discharges such employee from employment without providing severance benefits or other monetary payment to such employee, unless such employer discharges such employee for cause. Such severance benefits or other monetary payment shall be disclosed upon execution of the covenant not to compete.

"Low-wage employee" means an employee (i) whose average weekly earnings, calculated by dividing the employee's earnings during the period of 52 weeks immediately preceding the date of termination of employment by 52, or if an employee worked fewer than 52 weeks, by the number of weeks that the employee was actually paid during the 52-week period, are less than the average weekly wage of the Commonwealth as determined pursuant to subsection B of § 65.2-500 or (ii) who, regardless of his average weekly earnings, is entitled to overtime compensation under the provisions of 29 U.S.C. § 207 for any hours worked in excess of 40 hours in any one workweek. "Low-wage employee" includes interns, students, apprentices, or trainees employed, with or without pay, at a trade or occupation in order to gain work or educational experience. "Low-wage employee" also includes an individual who has independently contracted with another person to perform services independent of an employment relationship and who is compensated for such services by such person at an hourly rate that is less than the median hourly wage for the Commonwealth for all occupations as reported, for the preceding year, by the Bureau of Labor Statistics of the U.S. Department of Labor. For the purposes of this section, "low-wage employee" does not include any employee whose earnings are derived, in whole or in predominant part, from sales commissions, incentives, or bonuses paid to the employee by the employer.

Nothing in this section shall serve to limit the creation or application of: 1. Nondisclosure agreements intended to prohibit the taking, misappropriating, threatening to misappropriate, or sharing of certain information to which an employee has access, including trade secrets, as defined in § 59.1-336 , and proprietary or confidential information; or

The enforceability of a provision that restricts competition is a question of law that we review de novo. Omniplex World Servs. Corp. v. US Investigations Servs., Inc., 270 Va. 246, 249, 618 S.E.2d 340, 342 (2005). It is enforceable if it “is narrowly drawn to protect the employer’s legitimate business interest, is not unduly burdensome on the employee’s ability to earn a living, and is not against public policy.”

The employer bears the burden of proving each of these factors. Modern Env’ts, Inc. v. Stinnett, 263 Va. 491, 493, 561 S.E.2d 694, 695 (2002). When evaluating whether the employer has met that burden, we consider the “function, geographic scope, and duration” elements of the restriction.

These elements are “considered together” rather than “as three separate and distinct issues.”

Because such restrictive covenants are disfavored restraints on trade, the employer bears the burden of proof and any ambiguities in the contract will be construed in favor of the employee.

Each non-competition agreement must be evaluated on its own merits, balancing the provisions of the contract with the circumstances of the businesses and employees involved.

This Court evaluates the validity and enforceability of restrictive covenants in employment agreements using well settled principles. First, covenants in restraint of trade are not favored, will be strictly construed, and, in the event of an ambiguity, will be construed in favor of the employee.

Second, the employer bears the burden to show that the restraint is no greater than necessary to protect a legitimate business interest, is not unduly harsh or oppressive in curtailing an employee's ability to earn a livelihood, and is reasonable in light of sound public policy.

Because a demurrer cannot be used to decide on the merits whether a restraint on competition is enforceable, we will reverse the circuit court's judgment.

The premise running through Simmons, Modern Environments, Home Paramount, and our other decisions is that restraints on competition are neither enforceable nor unenforceable in a factual vacuum. Based on evidence presented, a trial court must ascertain whether a restraint "'is narrowly drawn to protect the employer's legitimate business interest, is not unduly burdensome on the employee's ability to earn a living, and is not against public policy.'"

"Covenant not to compete" means a covenant or agreement, including a provision of a contract of employment, between an employer and employee that restrains, prohibits, or otherwise restricts an individual's ability, following the termination of the individual's employment, to compete with his former employer. A "covenant not to compete" shall not restrict an employee from providing a service to a customer or client of the employer if the employee does not initiate contact with or solicit the customer or client.

2. Covenants not to compete or similarly restrictive covenants with any health care professional or such person's business entity as part of a sale of business when the transaction includes the sale of all or substantially all of (a) the operating assets together with the goodwill of the health care professional's business entity, (b) the operating assets of a division or subsidiary of the health care professional's business entity together with the goodwill of that division or subsidiary, or (c) the ownership interest of the health care professional's business entity or any division or subsidiary thereof. In such transactions, the seller and buyer may enter a covenant not to compete or similarly restrictive covenant for the health care professional or such person's business entity, provided that such covenant not to compete or similarly restrictive covenant is reasonable in scope, duration, and geographic area.

I. Nothing in this section shall serve to limit the ability of employers of health care professionals to: 1. Include provisions in employment agreements, through a promissory note or otherwise, that require repayment for all or a prorated portion of recruitment-related costs, including relocation expenses, signing or retention bonuses, and other remuneration provided to induce relocation or establishment of a practice in a specified geographic area, as well as recruiting, education, or training expenses from a departing health care professional who has been employed for fewer than five years, and such provisions shall be valid and enforceable by law; or 2. Include provisions in employment agreements requiring a health care professional, for the benefit of an employer and for a stated period of time following termination, to refrain from soliciting or attempting to solicit, directly or by assisting others, any business from any of such employer's customers, including actively seeking prospective customers, with whom the employee had material contact during his employment, for purposes of providing products or services that are the same or substantially similar to those provided by the employer, except for any notice or communication as required by state or federal law. Any reference to a prohibition against soliciting or attempting to solicit customers shall be narrowly construed to apply only to (i) the health care professional's customers, including actively sought prospective customers, with whom the health care professional had material contact during employment and (ii) products and services that are the same as or substantially similar to those provided by the employer. Such provisions shall be valid and enforceable by law. Such provisions shall not preclude a health care professional from disclosing the following information to a patient to whom the health care professional was providing consultation or treatment before departure from an employer: the health care professional's continuing practice of medicine, the health care professional's new contact information, and the patient's right to choose a health care professional.

D. An employee or health care professional may bring a civil action in a court of competent jurisdiction against any former employer or other person that attempts to enforce a covenant not to compete against such employee in violation of this section. An action under this section shall be brought within two years of the latter of (i) the date the covenant not to compete was signed, (ii) the date the employee or health care professional learns of the covenant not to compete, (iii) the date the employment relationship is terminated, or (iv) the date the employer takes any step to enforce the covenant not to compete. The court shall have jurisdiction to void any covenant not to compete with an employee or health care professional and to order all appropriate relief, including enjoining the conduct of any person or employer, ordering payment of liquidated damages, and awarding lost compensation, damages, and reasonable attorney fees and costs. No employer may discharge, threaten, or otherwise discriminate or retaliate against a low-wage employee or health care professional for bringing a civil action pursuant to this section.

E. Any employer that violates the provisions of subsection B or C as determined by the Commissioner shall be subject to a civil penalty of $10,000 for each violation. Civil penalties owed under this subsection shall be paid to the Commissioner for deposit in the general fund. F. If the court finds a violation of the provisions of this section, the plaintiff shall be entitled to recover reasonable costs, including costs and reasonable fees for expert witnesses, and attorney fees from the former employer or other person who attempts to enforce an unlawful covenant not to compete against such plaintiff.

Home Paramount asserts that the circuit court erred by focusing on the language of the Provision prohibiting Shaffer from “engag[ing] indirectly or concern[ing] himself . . . in any manner whatsoever” in pest control “as an owner, agent, servant, representative, or employee, and/or as a member of a partnership and/or as an officer, director or stockholder of any corporation, or in any manner whatsoever.” By doing so, Home Paramount argues, the court took those words out of context and gave undue weight to the function element of the enforceability analysis to the exclusion of the geographic scope and duration elements. Home Paramount contends the geographic scope was relatively narrow and the duration was one commonly accepted for such provisions, so those elements compensate for the breadth of the function element, making the Provision as a whole no broader than necessary to protect its legitimate business interests. We disagree. 3 We have consistently assessed the function element of provisions that restrict competition by determining whether the prohibited activity is of the same type as that actually engaged in by the former employer.

We acknowledge that the language of the provision we upheld in Paramount Termite is identical to the Provision. However, we have incrementally clarified the law since that case was decided in 1989. In the intervening twenty-two years, we have gradually refined its application beginning with Blue Ridge Anesthesia and continuing through Advanced Marine Enterprises, Simmons, Motion Control Systems, and ultimately Omniplex World Services in 2005. Therefore, to the extent that Paramount Termite conflicts with any portion of our holding today, Paramount Termite is overruled.

Because we have found the circuit court did not err in ruling the Provision unenforceable, Home Paramount’s evidence of Shaffer’s actual breach was not relevant. III. CONCLUSION For the foregoing reasons, we will affirm the judgment of the circuit court.

Because the prohibition in this non- competition provision is not limited to employment that would be in competition with Omniplex, the covenant is overbroad and unenforceable. Motion Control Sys., 262 Va. at 37-38, 546 S.E.2d at 426; Richardson, 203 Va. at 795, 127 S.E.2d at 117. Accordingly, for the reasons stated, we will affirm the judgment of the trial court.

In the absence of any justification for imposing the instant restraint on an employee's ability to earn a livelihood, Modern has not carried its burden of showing that the restrictive covenant at issue is reasonable and no greater 4 than necessary to protect a legitimate business interest.

"Health care professional" means any person licensed, registered, or certified by the Board of Medicine, Nursing, Counseling, Optometry, Psychology, or Social Work.

G. Every employer shall post a copy of this section or a summary approved by the Department in the same location where other employee notices required by state or federal law are posted. An employer that fails to post a copy of this section or an approved summary of this section shall be issued by the Department a written warning for the first violation, shall be subject to a civil penalty not to exceed $250 for a second violation, and shall be subject to a civil penalty not to exceed $1,000 for a third and each subsequent violation as determined by the Commissioner. Civil penalties owed under this subsection shall be paid to the Commissioner for deposit in the general fund. The Commissioner shall prescribe procedures for the payment of proposed assessments of penalties that are not contested by employers. Such procedures shall include provisions for an employer to consent to abatement of the alleged violation and to pay a proposed penalty or a negotiated sum in lieu of such penalty without admission of any civil liability arising from such alleged violation.

(1) A noncompetition covenant is void and unenforceable: (a)(i) Unless the employer discloses the terms of the covenant in writing to the prospective employee no later than the time of the initial oral or written acceptance of the offer of employment and, if the agreement becomes enforceable only at a later date due to changes in the employee's compensation, the employer specifically discloses that the agreement may be enforceable against the employee in the future; or (ii) If the covenant is entered into after the commencement of employment, unless the employer provides independent consideration for the covenant; (b) Unless the employee's earnings from the party seeking enforcement, when annualized, exceed one hundred thousand dollars per year. This dollar amount must be adjusted annually in accordance with RCW 49.62.040; (c) If the employee is terminated as the result of a layoff, unless enforcement of the noncompetition covenant includes compensation equivalent to the employee's base salary at the time of termination for the period of enforcement minus compensation earned through subsequent employment during the period of enforcement. (2) A court or arbitrator must presume that any noncompetition covenant with a duration exceeding eighteen months after termination of employment is unreasonable and unenforceable. A party seeking enforcement may rebut the presumption by proving by clear and convincing evidence that a duration longer than eighteen months is necessary to protect the party's business or goodwill. [ 2024 c 36 s 3; 2019 c 299 s 3.]

(1) Beginning on June 30, 2027, all noncompetition covenants are void and unenforceable regardless of when the parties entered into the noncompetition covenant. (2) It is a violation of this chapter for an employer to enforce, attempt to enforce, or threaten to enforce against an employee or worker any noncompetition covenant, to represent that the employee or worker is subject to a noncompetition covenant, or to enter into or attempt to enter into a noncompetition covenant with an employee or worker. (3) By October 1, 2027, an employer must make reasonable efforts to provide written notice to all current and former employees and independent contractors whose noncompetition covenant is still within its effective time period, that their noncompetition covenant is void and unenforceable. [ 2026 c 149 s 4; 2024 c 36 s 3; 2019 c 299 s 3.]

The dollar amounts specified in RCW 49.62.020 and 49.62.030 must be adjusted annually for inflation. Annually on September 30th the department of labor and industries must adjust the dollar amounts specified in this section by calculating to the nearest cent using the consumer price index for urban wage earners and clerical workers, CPI-W, or a successor index, for the twelve months prior to each September 1st as calculated by the United States department of labor. The adjusted dollar amount calculated under this section takes effect on the following January 1st. [ 2019 c 299 s 5.]

(1) "Earnings" means the compensation reflected on box one of the employee's United States internal revenue service form W-2 that is paid to an employee over the prior year, or portion thereof for which the employee was employed, annualized and calculated as of the earlier of the date enforcement of the noncompetition covenant is sought or the date of separation from employment. "Earnings" also means payments reported on internal revenue service form 1099-MISC for independent contractors.

(4) "Noncompetition covenant" includes every written or oral covenant, agreement, or contract by which an employee or independent contractor is prohibited or restrained from engaging in a lawful profession, trade, or business of any kind. A "noncompetition covenant" also includes an agreement that directly or indirectly prohibits the acceptance or transaction of business with a customer. A "noncompetition covenant" does not include: (a) A nonsolicitation agreement; (b) a confidentiality agreement; (c) a covenant prohibiting use or disclosure of trade secrets or inventions; (d) a covenant entered into by a person purchasing or selling the goodwill of a business or otherwise acquiring or disposing of an ownership interest, but only if the person signing the covenant purchases, sells, acquires, or disposes of an interest representing one percent or more of the business; or (e) a covenant entered into by a franchisee when the franchise sale complies with RCW 19.100.020(1). (5) "Nonsolicitation agreement" means an agreement between an employer and employee that prohibits solicitation by an employee, upon termination of employment: (a) Of any employee of the employer to leave the employer; or (b) of any current customer of the employer to cease or reduce the extent to which it is doing business with the employer. (6) "Party seeking enforcement" means the named plaintiff or claimant in a proceeding to enforce a noncompetition covenant or the defendant in an action for declaratory relief. [ 2024 c 36 s 2; 2019 c 299 s 2.]

(1) Upon a violation of this chapter, the attorney general, on behalf of a person or persons, may pursue any and all relief. A person aggrieved by a noncompetition covenant may bring a cause of action to pursue any and all relief provided for in subsections (2) and (3) of this section. (2) If a court or arbitrator determines that a noncompetition covenant violates this chapter, the violator must pay the aggrieved person the greater of his or her actual damages or a statutory penalty of five thousand dollars, plus reasonable attorneys' fees, expenses, and costs incurred in the proceeding. (3) If a court or arbitrator reforms, rewrites, modifies, or only partially enforces any noncompetition covenant, the party seeking enforcement must pay the aggrieved person the greater of his or her actual damages or a statutory penalty of five thousand dollars, plus reasonable attorneys' fees, expenses, and costs incurred in the proceeding. (4) A cause of action may not be brought regarding a noncompetition covenant signed prior to January 1, 2020, if the noncompetition covenant is not being enforced or explicitly leveraged. [ 2024 c 36 s 5; 2019 c 299 s 9.]

(1) Upon a violation of this chapter, the attorney general, on behalf of a person or persons, may pursue any and all relief. A person aggrieved by a violation of this chapter may bring a cause of action to pursue any and all relief provided for in subsection (2) of this section. (2) If a court or arbitrator determines that a person has violated this chapter, the violator must pay the aggrieved person the greater of his or her actual damages or a statutory penalty of five thousand dollars, plus reasonable attorneys' fees, expenses, and costs incurred in the proceeding. [ 2026 c 149 s 5; 2024 c 36 s 5; 2019 c 299 s 9.]

(1) A noncompetition covenant is void and unenforceable against an independent contractor unless the independent contractor's earnings from the party seeking enforcement exceed two hundred fifty thousand dollars per year. This dollar amount must be adjusted annually in accordance with RCW 49.62.040. (2) The duration of a noncompetition covenant between a performer and a performance space, or a third party scheduling the performer for a performance space, must not exceed three calendar days. [ 2019 c 299 s 4.]

(1) Subject to subsection (2) of this section, an employer may not restrict, restrain, or prohibit an employee earning less than twice the applicable state minimum hourly wage from having an additional job, supplementing their income by working for another employer, working as an independent contractor, or being self-employed. (2)(a) This section shall not apply to any such additional services when the specific services to be offered by the employee raise issues of safety for the employee, coworkers, or the public, or interfere with the reasonable and normal scheduling expectations of the employer. (b) This section does not alter the obligations of an employee to an employer under existing law, including the common law duty of loyalty and laws preventing conflicts of interest and any corresponding policies addressing such obligations. [ 2019 c 299 s 8.]

This chapter applies to all proceedings commenced on or after January 1, 2020, regardless of when the cause of action arose. To this extent, this chapter applies retroactively, but in all other respects it applies prospectively. [ 2019 c 299 s 11.]

(1) RCW 49.62.010, 49.62.020, 49.62.080, and 49.62.090 apply to all proceedings commenced on or after June 30, 2027, regardless of when the cause of action arose. (2) Legal proceedings commenced before June 30, 2027, will be governed by this chapter as amended prior to June 30, 2027. [ 2026 c 149 s 7; 2019 c 299 s 11.]

This act takes effect January 1, 2020. [ 2019 c 299 s 13.]

Effective date—2026 c 149: "This act takes effect June 30, 2027." [ 2026 c 149 s 9.]

(3) The provisions in this chapter facilitating workforce mobility and protecting employees and independent contractors need to be liberally construed and exceptions narrowly construed. [ 2024 c 36 s 1; 2019 c 299 s 1.]

A provision in a noncompetition covenant signed by an employee or independent contractor who is Washington-based is void and unenforceable: (1) If the covenant requires the employee or independent contractor to adjudicate a noncompetition covenant outside of this state; (2) To the extent it deprives the employee or independent contractor of the protections or benefits of this chapter; or (3) If it allows or requires the application of choice of law principles or the substantive law of any jurisdiction other than Washington state. [ 2024 c 36 s 4; 2019 c 299 s 6.]

(3)(a) "Noncompetition covenant" includes every written or oral covenant, agreement, or contract that prohibits or restrains an employee or independent contractor from engaging in a lawful profession, trade, or business of any kind. (b) "A noncompetition covenant" also includes a covenant, agreement, or contract between a performer and a performance space, or a third party scheduling the performer for a performance space, that prohibits or restrains the performer from engaging in a lawful performance. (c) A "noncompetition covenant" also includes an agreement that directly or indirectly prohibits the acceptance or transaction of business with a customer. (d) A "noncompetition covenant" also includes any provision in an agreement that threatens, demands, requires, or otherwise effectuates that an individual return, repay, or forfeit any right, benefit, or compensation, as a consequence of the individual engaging in a lawful profession, trade, or business of any kind. (e) A "noncompetition covenant" does not include: (i) A nonsolicitation agreement; (ii) a confidentiality agreement; (iii) a covenant prohibiting use or disclosure of trade secrets or inventions; (iv) a covenant entered into by a person purchasing or selling the goodwill of a business or otherwise acquiring or disposing of an ownership interest, but only if the person signing the covenant purchases, sells, acquires, or disposes of an ownership interest representing one percent or more of the business; (v) a covenant entered into by a franchisee when the franchise sale complies with RCW 19.100.020(1); or (vi) a written agreement to repay out-of-pocket educational expenses if the agreement: (A) Expires within 18 months of the employee's start date for employment; (B) limits repayment to the pro rata portion of the remaining time of the 18-month period; and (C) releases the employee from the obligation to repay if the employee's separation from employment is based on "good cause" under RCW 50.20.050. (4) "Nonsolicitation agreement" means an agreement between an employer and employee that prohibits solicitation by an employee, upon termination of employment: (a) Of any employee of the employer to leave the employer; or (b) of any current or prospective customer, patient, or client of the employer to shift business away from *with [((with))] the employer if the employee established or substantially developed a direct relationship with the customer, patient, client, or prospect through the employee's work for the employer and the prohibition expires no later than 18 months following termination of employment. An agreement that directly or indirectly prohibits the acceptance or transaction of business with a customer, patient, or client is not a "nonsolicitation agreement." (5) "Party seeking enforcement" means the named plaintiff or claimant in a proceeding to enforce a noncompetition covenant or the defendant in an action for declaratory relief. [ 2026 c 149 s 3; 2024 c 36 s 2; 2019 c 299 s 2.]

A covenant by an assistant, servant or agent not to compete with his or her employer or principal during the term of the employment or agency, or after the termination of that employment or agency, within a specified territory and during a specified time is lawful and enforceable only if the restrictions imposed are reasonably necessary for the protection of the employer or principal. Any covenant, described in this section, imposing an unreasonable restraint is illegal, void and unenforceable even as to any part of the covenant or performance that would be a reasonable restraint.

We conclude that the customer and confidentiality clauses are reasonably necessary to protect Star Direct and therefore enforceable. The business clause, however, is overbroad and unenforceable. We also hold that the customer and confidentiality clauses are divisible from the business clause and enforceable on their own terms. We thus affirm in part and reverse in part the decision of the court of appeals, and remand this cause to the circuit court for further proceedings consistent with this opinion.

We hold that an employer's forbearance in exercising its right to terminate an at-will employee constitutes lawful consideration for signing a restrictive covenant. Although, theoretically, an employer could terminate an employee's employment shortly after having the employee sign a restrictive covenant, *107 the employee would then be protected by other contract formation principles such as fraudulent inducement or good faith and fair dealing, so that the restrictive covenant could not be enforced.

In this case, the circuit court made no determination as to the reasonableness of the covenant's terms. Because the record and arguments before us are undeveloped on the issue of reasonableness, we decline to address it. Accordingly, we reverse the decision of the circuit court and remand the cause to that court for further proceedings consistent with this opinion.

We have interpreted this as establishing five prerequisites that a restrictive covenant must meet in order to be enforceable under Wisconsin law. A restrictive covenant must: (1) be necessary for the protection of the employer, that is, the employer must have a protectable interest justifying the restriction imposed on the activity of the employee; (2) provide a reasonable time limit; (3) provide a reasonable territorial limit; (4) not be harsh or oppressive as to the employee; and (5) not be contrary to public policy. Lakeside Oil Co. v. Slutsky, 8 Wis. 2d 157, 162-67 , 98 N.W.2d 415 (1959). The employer has the burden of proof as to the reasonableness of the non-compete. NBZ, Inc., 185 Wis. 2d at 840 .

Restrictive covenants in Wisconsin are prima facie suspect as restraints of trade that are disfavored at law, and must withstand close scrutiny as *288 to their reasonableness. Streiff, 118 Wis. 2d at 611 . They are not to be construed to extend beyond their proper import or farther than the contract language absolutely requires. Id. Rather, they are to be construed in favor of the employee. Id.

The foundational inquiry for determining whether a covenant is divisible is whether, if the unreasonable portion is stricken, the other provision or provisions may be understood and independently enforced. This inquiry will be fact-intensive and depend on the totality of the circumstances. In the context of multiple non-compete provisions in a contract, indivisibility will usually be seen by an intertwining, or inextricable link, between the various provisions via a textual reference such that one provision cannot be read or interpreted without reference to the other. *311 Restrictive covenants are divisible when the contract contains different covenants supporting different interests that can be independently read and enforced. 11 Overlap, even substantial overlap, between clauses is not necessarily determinative.

When an employer promises not to fire an existing at-will employee if the employee agrees to sign a restrictive covenant, the employer violates the spirit of the agreement when the employer fires the employee moments after the employee signs the covenant. Firing the employee moments after the agreement is executed would accomplish "exactly what the agreement of the parties sought to prevent," which constitutes an independent breach, id., ¶ 28 (citation omitted), and would make the restrictive covenant unenforceable. The modification in the employment relationship when an existing at-will employee signs a restrictive covenant is the restrictive covenant, not a new employment contract of reasonable duration; and it is the modification that would become unenforceable if the employer acts in bad faith.