Monthly Archives: December 2016

The Indiana Court of Appeals has provided additional guidance on the enforceability of noncompetition and nonsolicitation agreements.  Noncompetes, as they are often known, are regularly enforced when a former employer demonstrates that the restriction is reasonable. The reasonableness of a restriction is measured in two steps:  1) Whether the employer has a legitimate protectable interest, and 2) whether the covenants are reasonable in scope as to the time, geography and activity restricted. See our prior post here The Court recently considered whether a provision that extended the time of the noncompete for the length of a breach was enforceable.  See Hannum Wagle & Cline Engineering, Inc. et al v. American Consulting, Inc., d/b/a American Structurepoint, Inc., found at http://www.in.gov/judiciary/opinions/pdf/11301601jsk.pdf In Hannum, the noncompete provided “that the ‘Non- Compete Period’ shall be extended by the duration of any violation by [Kuntz] of the terms of Paragraph 2 of this Agreement.” These clauses are common and are important to former employers who know that litigation takes time and want the offending employee barred for competing for as long as possible. Without such clauses, an employee is incentivized to delay litigation as long as possible, because he or she can run out the clock of any inunction for the noncompetition period.  The former employee does run the risk that he or she may later be held liable for breach and damages will have accrued.  However, the whole point of seeking an injunction is because it is difficult to prove damages. However, the Court affirmed Kuntz v. EVI, LLC, 999…