Phil joins Sky-High Designs as a designer. He signs an employee agreement that says he will not engage in design work in the city for six months after termination of his employment with the firm. Phil works with the firm for two years and then resigns to immediately join as a designer in another firm in the same city. Sky-High Designs sues him for breach of contract, and is likely to:
A) lose because employee contracts that restrict trade are illegal.
B) lose because Phil has free will to do as he chooses.
C) win because Phil's act is a violation of the Blue laws.
D) win because the restriction has reasonable geographic and time restrictions.

Question

Quizplus · Accepted Answer

Employment contracts often provide that employees will not compete with or work for a competitor of their employer after they have ceased their employment. If such a restriction is reasonably necessary to prevent an employee from disclosing trade secrets or taking away the employer's customers, and it has reasonable geographic and time limitations, it is also likely to be upheld. Hence, Sky-High Designs is most likely to win.

Phil Joins Sky-High Designs as a Designer