Question

To be valid, a noncompete clause must be a. ancillary to a legitimate bargain. b. reasonable in time, geographical area, and scope of activity when ancillary to the sale of a business. c. necessary to protect trade secrets, confidential information, or customer lists developed over an extended time when ancillary to an employment contract. d. All of the above.

Answer 1

Answer:

(D) All of the above

Explanation:

A non-compete clause (also referred to a contract in restraint of trade) is an agreement wherein an employee consents not to engage in a similar occupation or disseminate trade secrets that is likely to occasion damage or compete against the business of his employer.

By drafting such an agreement, employers can keep valuable information (like intellectual property) secret and prevent former employees from exploiting sensitive information (trade secrets, customer/client lists, marketing plans, etc.) in case they decide to work for the competition or start a similar business.

And for this agreement to be valid, it must be ancillary to a legitimate bargain, reasonable in time, geographical area, and scope of activity when ancillary to the sale of a business, and necessary to protect trade secrets, confidential information, or customer lists developed over an extended time when ancillary to an employment contract.