When individuals work in high-demand industries or in roles that rely on specialized knowledge, it’s not uncommon for them to sign non-compete agreements.
A non-compete agreement is a contract between an employer and an employee that prohibits the employee from working for the employer’s competitors or from creating a similar business to the employer’s within a specified geographic area for a set period of time.
When it comes to which U.S. states tend to allow non-compete agreements, Mississippi is one that has no restrictions. Yet, still, the Mississippi judicial system disfavors non-compete agreements. As a result, Mississippi courts are strict when it comes to any Mississippi non-compete law.
Understanding the Enforceability of Non-Compete Agreements
A Mississippi non-compete law is only enforceable if it’s reasonable in time, geographic scope, and scope of activity.
Since the Mississippi non-compete law protects the interests of employers, Mississippi courts go out of their way to cast suspicion on non-compete agreements in an effort to put the rights of employees first. In fact, to ensure that employees of businesses with non-compete agreements maintain their rights, Mississippi courts instill a reasonability test.
Non-Compete Agreement Reasonableness Test
The Mississippi courts examine the duration of time that non-compete agreements should have restrictive power based on a standard of “reasonableness.” Typically, this standard of “reasonableness” is anywhere from six months to two years, with two years being considered the strong limit of a reasonable time.
In terms of geographic scope, Mississippi courts determine the reasonable standard to be areas where the employer does business and has influence. To be more specific, the reasonable standard is typically anywhere from a 50-mile to a 150-mile radius from where the employer does business or is influential.
The reasonable standard for activities that the Mississippi non-compete law can prohibit employees from taking part in includes the ability to work for an employer’s competitors and the ability to create a similar business to the employer.
Value of a Strict Mississippi Reasonableness Test
It’s important that any Mississippi non-compete law is very specific when detailing time duration restrictions, geographic scope restrictions, and scope of activity restrictions. This is because any Mississippi non-compete agreement that’s overly broad when detailing such restrictions will be struck down and voided in Mississippi courts due to violating the state’s legal requirement to make non-compete agreements reasonable.
Having strict and “reasonable” criteria for the scope of Mississippi non-compete agreements protects employees from facing unfair financial hardships due to possibly not being able to get new or higher-paying jobs in their professions after leaving their employers.
The Three Pillars of a Reasonable Restrictive Covenant
A restrictive covenant is a contract clause between an employer and employee that limits an employee’s actions.
While a non-compete agreement is one type of restrictive covenant, it’s not the only type of restrictive covenant. In fact, there are three pillars, or categories, that restrictive covenants for employment law fall into. These three pillars are the following:
- Non-Compete Agreements – A type of restrictive covenant that focuses on prohibiting employees from working for competitors of their employers or from creating similar types of businesses as their employers, for a set period of time.
- Non-Solicitation Agreement – A type of restrictive covenant that prohibits former employees from poaching, or taking, the staff, clients, customers, or vendors from their former employers to bring to new employers.
- Confidentiality/Non-Disclosure Agreements (NDAs) – A type of restrictive covenant that prohibits employees from ever sharing the trade secrets, client lists and data, or strategic business plans of an employer.
Legitimate Business Interests Worthy of Protection
The purpose of any restrictive covenant is to protect the interests of businesses. The business interests that are legitimate enough to be worthy of legal protection include trade secrets, specialized training, customer information, and client lists and data.
Mississippi Blue Pencil Doctrine and Contract Reformation
The Mississippi blue pencil doctrine is a legal rule that allows the courts to strike any restrictions in a non-compete agreement that they consider unreasonable or too broad, without voiding the entire contract.
Businesses benefit from the blue pencil doctrine because it helps them not to have to create an entire non-compete agreement again from scratch anytime the courts find a legally unreasonable or broad detail in their contracts.
Consequences of Breaching a Valid Non-Compete Agreement
As difficult as the Mississippi court system may appear to be on employers seeking restrictive covenants, there are many legal remedies that employers can use to protect themselves from employee breaches in non-compete agreements. For example, employers in Mississippi can get temporary restraining orders against employees in breach of their non-compete agreements.
A permanent injunction is a final court order that requires an individual to perform certain duties or permanently stop certain actions.
Mississippi employers can use permanent injunctions as a long-term legal remedy to stop ongoing illegal actions taken by current or former employees who are in breach of the Mississippi non-compete law.
Monetary damages, or financial compensation for losses caused by employee breaches of contract, can also act as a form of legal remedy for employers with non-compete agreements.
Receive Assistance from a Mississippi Contract Dispute Lawyer
As a Mississippi law firm with extensive business litigation experience, Owen, Owen & Smith Law can help you with employment contract disputes. Thus, if you need help handling employer non-compete agreements or any other type of restrictive covenant, get an expert Mississippi contract dispute lawyer from Owen, Owen & Smith Law.
