January 01, 2013

Modern Indentured Servitude? A Fresh Look at Employee Restrictive Covenants

Kenneth J. Ashman, Joan M. Swartz, and Rick L. Lambert

A tension exists between our strong belief in the freedom of contract and our equally strong belief that trade should not be restrained. What happens when we contract to restrain trade? What happens when we contract to restrain an employee from postemployment competitive endeavors? Should courts enforce such contracts? In the context of employer-employee restrictive covenants—those contracts that prohibit employees for obtaining competitive employment elsewhere—the debate is not new.

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