As Landon Shore and other recent decisions show, Nevada courts are reluctant to impose non-competition bans. Any potentially inappropriate clause may lead an employer to lose the protections provided by the non-compete agreement. Employers should evaluate all non-competition and other restrictive agreements to ensure they are appropriate, including existing agreements and agreements for potential workers. While Nevada`s non-compete status was changed on June 3, 2017 and it is no longer said that a non-compete agreement must be «reasonable in scope and duration» (as was the case previously with landon Shore), geographic restriction is still part of Nevada law. The current law states that non-competition prohibitions «must not be subject to a greater restriction than is necessary to protect the employer» and «must not impose unreasonable hardship on the worker.» See Hansen/Cf. Edwards, 426 P.2d 792, 793 (nv. 1967) (the period during which the deduction must last and the territory to be included are important factors to consider» when it comes to whether a non-compete agreement «… That… greater restraint than is reasonably necessary to protect the business»). With NRS 613.195, employers may have a better chance of imposing their competitive contracts than at the time of the Golden Route. Even if a court finds that the scope of an employer`s competition contracts is disproportionate or broader than necessary, the court is required to amend the agreement to be appropriate and applicable under NRS 613.195. The Nevada Supreme Court also eliminated the «blue pencil» doctrine, which historically allowed courts to process the content of a non-compete agreement, thereby transforming an unenforceable provision into an enforceable provision.
The Supreme Court found that preliminary proceedings are busy interpreting contracts and not writing. While non-competitive agreements are generally applicable in Nevada2, Nevada Supreme Court precedents have been a little confusing with respect to the practice of blue pencil, that is, revising these agreements to make them enforceable. The practice began in the pioneering case of Hansen v. Edwards3, where the Nevada Supreme Court found that the geographic scope and duration of a competition alliance were inappropriate. But instead of treating the agreement as totally unenforceable, the Nevada Supreme Court amended and reduced the geographic scope and duration of a 100-mile radius around Reno, Nevada, with an unlimited duration to the city limits of Reno with a duration of one year.4 Similarly, in Von Ellis v. 1979. to impose a clinic`s injunction on the basis of a non-competition agreement prohibiting a medical worker from practising his specialty of «orthopaedic surgery,» since none of the clinic`s physicians were an orthopaedic specialist.5 However, the court amended the restriction to prohibit the physician from participating in the broader «general practice of medicine» in order to protect the clinic`s «good will».6 to effectively change sections deemed inappropriate. It is precisely to avoid this situation that many companies expect employees to sign a contract called a «non-compete agreement.» This is usually signed when other contracts and working documents are signed at the beginning of the employment relationship. There are many legal considerations for workers when it comes to a non-compete clause, as such agreements often give rise to litigation.
HKM Employment Attorneys helps Las Vegas employees and their loved ones challenge non-compete bans.