Home » Noncompete » Valid Noncompete Must be Geographically Limited

Valid Noncompete Must be Geographically Limited

It is axiomatic in Texas that in order to be enforceable, a noncompete agreement must, in addition to other requirements, be reasonable in the scope of its geographic limitation. This is not an uncommon requirement, as a recent case out of Missouri shows.

When an employee left to pursue employment with another company, Sigma-Aldrich Corporation sought injunctive relief, attempting to enforce a noncompete agreement with that employee, Omar Vikin. In relevant part, the noncompete agreement prohibited Vikin from working for companies that sell competing products in locations where Sigma-Aldrich “markets or sells” products. The trial and appellate courts agreed with Vikin that this did not constitute a reasonable geographic scope without any specificity of limitation on the class with whom contact was limited.

The appellate court concluded that the noncompete “creates a global prohibition in which Sigma attempted to ban employees from working for any of its competitors globally in any capacity.” That global prohibition was an unlawful restraint on Vikin’s right to compete.

Employers and employees alike should pay particular attention to the scope of the noncompete agreement’s restrictions.

Sigma-Aldrich Corp. v. Vikin, No. ED100575 (Oct. 14, 2014)

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