Connecticut Non-Compete Agreement Template

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Connecticut Non-Compete Agreement Template

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Last updated October 17th, 2022

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A Connecticut non-compete agreement prohibits an employee from working for or as their employer’s competitor after they’ve left the job. The agreement allows a company owner to establish a geographical area and time frame wherein their ex-employee cannot engage in similar business activities or solicit their clients/customers. Connecticut courts will generally deem non-compete agreements enforceable so long as their restrictions are reasonable. However, non-compete agreements for certain professions, such as security guards, physicians, or home health service workers, are unenforceable.

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Enforceability in Connecticut

In Connecticut, a non-compete agreement can be enforced to protect an employer from unfair competition from a former employee (except in certain areas of work). The courts will decide to enforce an agreement by evaluating five (5) criteria:

“1. The length of time the restriction operates;
2. The geographical area covered;
3. The fairness of the protection accorded to the employer;
4. The extent of the restraint on the employee’s opportunity to pursue his occupation;
5. The extent of interference with the public’s interests.”[1]

When it IS Enforceable

  • Reasonable limitations. An NCAs reasonableness is determined on a case-by-case basis, taking into account various factors such as previous cases, the scope of the restrictions, and whether enforcement would negatively impact the public.[1]
  • Medical practice. Non-compete agreements for physicians are enforceable, provided that the following applies:
    • The non-compete is in accordance with the law and public policy.
    • It is reasonable in duration, geographic scope, and restrictions.
    • The duration does not exceed one (1) year.
    • The geographic radius is not greater than fifteen (15) miles from the physician’s main place of work.
    • The agreement was made before a valid partnership or ownership agreement.
    • The physician’s employment was not terminated by the employer (unless the employer ended the employment due to cause).[3]

When it’s NOT Enforceable

  • Security guards. Non-compete agreements are unenforceable for security guards unless their employer has given them access to trade secrets.[4] 
  • Broadcast employees. Workers employed in radio or television broadcasting cannot be bound to a non-compete agreement.[5] 
  • Homemakers, companions, and home health service workers. Covenants to not compete for individuals employed as homemakers, companions, or home health service workers are considered against public policy and unenforceable.[6] 
  • Legal practice. A lawyer cannot be restricted in their ability to practice law after leaving a firm.[7] 

Maximum Time Period

There is no statutory limit for the duration of non-compete agreement effectiveness, with the exception of those restricting a physician, which cannot exceed one (1) year.[3] 

Connecticut courts also take into account the agreement’s geographic scope. A longer duration can be enforced if the radius of the prohibited region isn’t too large.[8] 

Examples of time restrictions deemed reasonable by Connecticut courts include:

  • Two (2) years restricting an employee from working for their employer’s clients after their employment is terminated.[9]
  • Five (5) years and a geographic restriction of twenty (20) miles from the employer’s area of business.[10]
  • Five (5) years, due to an extensive customer list that required the employer years to compile.[11]
  • Six (6) months due to the employee’s access to company trade secrets.[12]

Geographical Area

In Connecticut, the reasonableness of the contract’s geographic area is evaluated together with the duration of the agreement. Larger zones are more easily enforced if the agreement has a shorter period.[8] 

In one case, a non-compete agreement without any specified geographic area was allowed by a Connecticut court due to the uniqueness and size of the company’s industry and, in turn, the reduced number of prospective buyers.[13]

Consideration

Non-compete agreements without consideration are invalid. Examples of sufficient consideration include employment, expanded employment, job promotions, or increased salary.[14] Continued employment is not considered enough consideration for a non-compete agreement, except for at-will employees in certain cases.[8][15]

Sources

  1. Robert S. Weiss & Assocs., Inc. v. Wiederlight, 208 Conn. 525, 529, 546 A.2d 216, 219 n.2 (1988)
  2. Deleo v. Equale & Cirone, LLP, 180 Conn. App. 744, 184 A.3d 1264 (Conn. App. Ct. 2018)
  3. Conn. Gen. Stat. § 20-14p
  4. Conn. Gen. Stat. § 31-50a
  5. Conn. Gen. Stat. § 31-50b
  6. Conn. Gen. Stat. § 20-681
  7. Connecticut Rules of Professional Conduct 5.6
  8. Van Dyck Printing Co. v. DiNicola, 43 Conn. Supp. 191, 648 A.2d 898 (Conn. Super. Ct. 1993)
  9. May v. Young, 125 Conn. 1, 6-7, 2 A.2d 385 (Conn. 1938)
  10. Ives Bros. v. Keeney, No. WWMCV064004952S, 2000 WL 35775696, at *9-10 (Conn. Super. Ct. Oct. 27, 2009)
  11. Scott v. Gen. Iron & Welding Co., 171 Conn. 132, 139-41, 368 A.2d 111, 116 (1976)
  12. Aetna Ret. Servs., Inc. v. Hug, No. CV970479974S, 1997 WL 396212, at *11 (Conn. Super. Ct. June 18, 1997)
  13. Xplore Technologies Corp. v. Killion, 2010 Ct. Sup. 19400 (Conn. Super. Ct. 2010)
  14. Torrington Creamery v. Davenport, 126 Conn. 515, 519-22 12 A.2d 780, 783 (Conn. 1940)
  15. Sartor v. Town of Manchester, 312 F. Supp. 2d 238, 244-45 (D. Conn. 2004)
  16. Braman Chem. Enterprises, Inc. v. Barnes, No. CV064020633S, 2006 WL 3859222, at *9 (Conn. Super. Ct. Dec. 12, 2006)
  17. Timenterial, Inc. v. Dagata, 29 Conn. Supp. 180, 182-86, 277 A.2d 512, 514-15 (Super. Ct. 1971)
  18. Gartner Grp. Inc. v. Mewes, No. CV91 0118332 S, 1992 WL 4766, at *5 (Conn. Super. Ct. Jan. 3, 1992)

Related Forms (2)

Connecticut Non-Disclosure Agreement – Allows a business to protect its confidential information.

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Connecticut Non-Solicitation Agreement – Prohibits an employee from pursuing business transactions with co-workers and clients after their employment terminates.

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