As a result, non-competition obligations between employers and workers are generally applicable as long as they comply with legal requirements for the size of the limited activity, duration and geographical restrictions. Specifically, non-rewards: Non-rewards: what you asked yourself and might not want to ask for. Examples of non-compete obligations that South Dakota courts consider appropriate: In general, South Dakota courts automatically maintain non-compete obligations between employers and workers that, without further analysis, fall within the legal parameters when a worker voluntarily resigns or is dismissed for that reason. Depending on the extent of the non-competition clause, the agreement applies in South Dakota. However, applicability is limited. The courts have found that restrictive alliances are inappropriate or have used the “blue pencil” rule to amend agreements in these situations: what should an employer do in the face of enhanced control of non-competition agreements between courts and legislators? First, companies should review their standard non-competition and non-invitation agreements to verify the adequacy of the restrictions. Think about the type of investment, training, resources and consideration the company makes available to employees who enter into such agreements beyond job retention. Businesses should continue to consider whether the restrictions may be related to legitimate and eligible business interests and use in the agreement the language that binds the restrictions to that commercial interest. Employers are more likely to enforce these agreements in court if necessary, by informing them of changes in legislation in the states where they operate and by regularly checking their non-competition agreements. Non-competition rules with workers can be implemented if they are properly re-eded. South Dakota law expressly authorizes agreements between employers and workers that require the worker not to engage directly or indirectly in the same company or profession as his employer, directly or indirectly, for up to two years from the date of termination of the contract, and not to recruit existing employer clients in a particular first or second class commune. , or any other specified area for a period of no more than two years from the date of termination of the contract, if the employer continues to enter into a similar transaction there.
With respect to the first employee, the tribunal found that prior to the signing of his non-competition clause, his employer had advised him that the agreement would only be executed against an employee who had made a “lateral change” as a competitor and that it would not be imposed on employees if they “improve themselves”. The court found that the employee had “improved” himself by starting a competing business, while he had earned less money with his new job. The tribunal then found that the employer had never intended to keep its promise to enforce its non-compete agreements only against workers who had moved laterally. The court found that the agreement was therefore caused by fraud and was not enforceable. With respect to the second employee, the court found that the owner, when he told the business owner that he was going to leave to start a new business, told him that he would not follow him “in any way” and wished him “good luck”. The Tribunal found that these statements constituted a waiver of the right to apply the non-competition agreement, although the owner stated that he was not aware of the employee`s contract not to participate in the competition when making the statements. The South Dakota Supreme Court upheld the Court`s rulings on the two employees and dismissed the plaintiffs` motions to impose alliances not to compete. This case is giving valuable lessons.