Smith runs a software-design business.He needed someone to handle some product demonstrations,so he hired Janet to do this work.In the employment contract,Smith insisted that Janet promise that,if she left the firm,she would not work for Smith's competitors within a stated period of time and within a stated geographical region.If Janet now wishes to leave the job,indicate the statement that accurately describes the likely effect of her promise.
A)Such promises are in restraint of trade and thus the courts invariably hold them to be invalid.
B)If the court thinks that such a promise is reasonable between the employer and employee and that the public interest will not be damaged,it will enforce it.
C)Such promises are valid only if given under seal.
D)Such promises are invariably held to be valid when they are part of the terms of employment and thus are given in consideration for getting the job.
E)If the court holds such a promise to be invalid,the whole employment contract is necessarily void as well.

Question

Quizplus · Accepted Answer

Such promises, also known as restrictive covenants or non-compete clauses, are not automatically invalid. In some cases, they may be enforceable if the court determines that they are reasonable in terms of scope, duration, and geographical area, and that they protect legitimate business interests of the employer, such as confidential information, trade secrets, customer goodwill, or specialized training. However, if the court finds that the promise is too broad, too long, or too restrictive, it may refuse to enforce it or modify its terms. The burden of proof is on the employer to justify the use of such a promise in the particular circumstances of the case. The fact that the promise was made in consideration of employment does not guarantee its validity.

Smith Runs a Software-Design Business