Restrictive Covenants

Question 1

Enforcement of Restrictive Covenants

Answer 1

Generally enforceable if it:

(1) FURTHERS A LEGITIMATE INTEREST of the ER;
(2) Is REASONABLY TAILORED IN SCOPE of activities, geography, and time

Question 2

Legitimate ER Interests

Answer 2

(1) Confidential information
(2) Customer relationships
(3) Investment in EE’s reputation in market
(4) Business Good Will

Question 3

Limitations in Scope

Answer 3

Covenant should be NO MORE RESTRICTIVE THAN NECESSARY to protect the legitimate interests at stake

Question 4

Judicial Modification of a Covenant: Blue Pencil States

Answer 4

Look to see if provisions are “divisible” and then strike out portion of the covenant that is excessive and enforce what is left