A properly drafted arbitration provision in the employment agreement would allow for efficient, low-cost enforcement, and offer multi-state employers greater confidence.
It's a familiar story: an employee bound by a non-competition covenant is recruited by a competitor in a jurisdiction that refuses to enforce the covenant, and a a race to the courthouse ensues. The employee files a declaratory-judgement action in the unfriendly jurisdiction to invalidate the non-compete, and the former employer files a competing enforcement action in its home state. With two parallel lawsuits, the results are far from ideal. At best, it's a costly jurisdictional fight with competing motions in different courts. At worst, the non-compete is invalidated.
Eprinted and posted with permission to Robins, Kaplan, Miller & Ciresi L.L.P.from Today's General Counsel
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