This form is a Post-Employment Restrictions on Competition for use with exiting employees exposed to commercial trade secrets or other confidential information as part of their job. This form includes a Noncompetition Covenant as well as other relevant clauses, such as a Savings Clause, a Consulting Option, and an Assignment Clause, that can be integrated into any agreement with the former employee.
South Dakota Post-Employment Restrictions on Competition, also known as non-compete agreements or post-employment covenants not to compete, are legal agreements that limit an employee's ability to compete with their former employer after the termination of their employment. These agreements aim to protect employers' trade secrets, confidential information, customer relationships, and competitive advantage. In South Dakota, there are certain requirements and limitations regarding the enforceability of post-employment restrictions on competition. The South Dakota Codified Laws Chapter 53-9 contains specific provisions regarding this matter. Employers seeking to implement such agreements must carefully adhere to these regulations to ensure their enforceability. Under South Dakota law, post-employment restrictions on competition are enforceable if they meet the following criteria: 1. Protection of legitimate business interests: The agreement must serve a legitimate business interest of the employer, such as protecting trade secrets, confidential information, or customer relationships. The restriction should be reasonable in scope and duration, tailored to protect specific interests without imposing undue hardship on the employee. 2. Mutual consideration: The employee must receive something of value in return for accepting the restrictions. This consideration can range from employment itself to promotion, access to trade secrets, or specialized training. 3. Limited duration: The duration of the restriction should be reasonable and proportionate to the protected interest. Courts often consider one to two years as the maximum duration for post-employment restrictions on competition. 4. Geographic scope: The geographic scope of the restriction must be necessary to protect the employer's interests. Limiting the restriction to the area where the employer operates or where the employee had significant interactions is generally more enforceable. 5. Reasonableness test: The courts in South Dakota employ a reasonableness test to evaluate the enforceability of post-employment restrictions on competition. The agreement must be reasonable in scope, duration, and geographical limitations to ensure a fair balance between the employer's interests and the employee's rights. It is essential for both employers and employees to understand the potential consequences and limitations associated with post-employment restrictions on competition. Violation of these agreements can result in legal action, damages, or injunctive relief against the breaching party. Different types of post-employment restrictions on competition in South Dakota may include non-compete agreements, non-solicitation agreements, and confidentiality agreements. Non-compete agreements restrict employees from engaging in similar business activities or working for direct competitors for a specified period within a specific geographic area. Non-solicitation agreements restrict employees from soliciting the employer's customers, clients, or employees for a certain period after termination. Confidentiality agreements aim to protect the employer's trade secrets, customer lists, or proprietary information from being disclosed or used by the employee. Compliance with South Dakota's legal requirements and the careful drafting of these agreements are crucial to ensuring their enforceability while respecting the rights of employees. Seeking legal advice from experienced professionals can be beneficial for both employers and employees when navigating post-employment restrictions on competition in South Dakota.
