Legal Question in Business Law in Delaware

Reasonable geographic region in a noncompete agreement

According to Delaware law, what would be considered a reasonable geographic region for an employee noncompete agreement with an OEM in the agricultural industry with approximately a dozen competitors throughout the United States. This company's headquarters are in central Indiana and they have 2 satellite companies(in Alabama and Missouri).The company is claiming the entire USA- is that reasonable??


Asked on 12/24/02, 3:17 pm

1 Answer from Attorneys
Bruce W. McCullough Bodell, Bove', Grace & Van Horn. P.C.

Re: Reasonable geographic region in a noncompete agreement

There is a fact-specific balancing test for each situation. In Faw, Casson & Co. v. Cranston, 375 A.2d 463, 465 (Del. Ch. 1977), the court said: "an agreement by an employee not to follow his trade or business for a limited time and in a limited geographical area is not void as against public policy when the purpose of such agreement and its reasonable effect is to protect an employer from sustaining damages which an employee's subsequent competition may cause...."

Please feel free to contact me if you want to discuss this matter further. This is general information for discussion purposes and is not legal advice.

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Answered on 12/26/02, 9:57 am


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