State Law Variance: Non-compete laws vary significantly by state, with some states like California prohibiting them almost entirely while others allow them with restrictions. State-specific limitations on duration, geographic scope, and scope of prohibited activities must be considered.
Low-Wage Worker Restrictions: Recent state law trends limiting or prohibiting non-compete agreements for low-wage workers must be taken into account when determining agreement applicability.
FTC Proposed Rule: Federal Trade Commission's proposed rule to ban non-compete agreements must be monitored for potential impact on agreement enforceability.
Antitrust Considerations: Federal antitrust laws must be considered to ensure the agreement doesn't create unfair competition or monopolistic practices.
Legitimate Business Interest: Agreement must protect legitimate business interests such as trade secrets, client relationships, and substantial training investments.
Time Limitations: Agreement must include reasonable time restrictions that are appropriate for the industry and jurisdiction.
Geographic Limitations: Agreement must specify reasonable geographic boundaries that don't overly restrict employment opportunities.
Scope of Activities: Agreement must reasonably define restricted activities, focusing on protecting genuine business interests without being overly broad.
Consideration Requirement: Agreement must provide valid consideration (something of value) in exchange for the non-compete restriction.
Salon-Specific Protections: Industry-specific considerations including protection of styling techniques, formulas, customer lists, and relationships must be appropriately addressed.
Enforceability Requirements: Agreement must not be overly restrictive, must protect legitimate interests, avoid undue hardship, and comply with public policy.
