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William Pentelovitch Article on Noncompetes Featured in Minneapolis/St Paul Business Journal

July 15, 2009

An article by William Pentelovitch, member of Maslon's Litigation Group, is featured in the July 10, 2009, edition of the Minneapolis/St. Paul Business Journal. The article, titled "Think that noncomplete deal protects you? You better be sure," highlights the pitfalls of noncompete agreements drafted for employees working in different states.

Pentelovitch's article offers a useful ten-point checklist of important facts to take into account when drafting noncompete agreements and trying to enforce them. In brief, they are:

1) Noncompete agreements are enforceable but only if they are reasonable and protect a legitimate business interest;

2) There are three "protectable interests" an employer can legitimately protect: goodwill, confidential information, and the benefits of highly specialized training;

3) Such agreements traditionally apply to a certain geographic territory;

4) Courts favor customer-specific restrictions over geographic restrictions;

5) Courts will also enforce subject-specific restrictions to protect confidential information instead of geographic or customer-specific restrictions;

6) In Minnesota, a court has "sound discretion" to rewrite "unreasonable" noncompete provisions to make them reasonable;

7) A noncompete signed before employment begins does not require independent consideration;

8) In many states, including Minnesota, a noncompete signed after employment begins must have adequate consideration;

9) Confidentiality agreements and trade secret statutes do not provide the same protection as noncompete agreements; and

10) A Minnesota employer with employees in multiple states should provide that Minnesota law governs.

He emphasizes, "If your company has employees in multiple states, it is prudent to have a lawyer help draft agreements, taking into account the laws of the various states where your employees are located. Otherwise, you run the very real risk of not being able to enforce your noncompetes when key employees leave your company and defect to your competitor."

William Pentelovitch is a trial lawyer with 35 years of experience and hundreds of jury and bench trials, as well as dozens of appeals in state and federal courts to his credit. He has also tried dozens of arbitrations. He practices nationally in the area of noncompete, trade secret and unfair competition litigation and is a leading authority in Minnesota in the area of ownership and governance disputes in corporations and partnerships. He is a Fellow of the International Academy of Trial Lawyers. Pentelovitch has been named to the list of the "Top 40 Business Litigation Attorneys" consecutively for the last six years and many times prior. He has also been listed in Best Lawyers in America for the past thirteen years and as one of the top nine commercial litigation attorneys in Minnesota by Chambers & Partners for each year since it began publishing Chambers USA.


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