The COVID-19 pandemic has accelerated an already shifting work landscape. Prior to the pandemic, some employees in certain specific positions worked remotely. Now, by necessity, the practice has become widespread. With this shift, many employers have come to realize that remote working is an easy and convenient alternative to the traditional in-office workspace. As the office environment changes, so too must the measures employers take to protect their business interests. One such measure — restrictive covenants — is often analyzed in terms of reasonableness of duration and geographic scope, but what happens when remote working renders the geographic scope meaningless?
Restrictive covenants, such as non-compete or non-solicitation agreements, are generally disfavored because they act as a restraint on trade. While some jurisdictions ban them outright, most jurisdictions require that, to be enforceable, the restrictions must be narrowly tailored to protect a legitimate business interest. That means that such agreements must be reasonable in both duration and geographic restriction. For example, a court may find that a nationwide non-compete imposed by a regional business is too restrictive and not designed to protect an actual business interest. Therefore, restrictions are generally more appropriately tied to a specific geographic distance from the employer’s location.
Location, Location, LocationWith remote working, however, an individual can be physically located within a geographic area, but direct their work to a location outside of that area. Some may argue that the legitimate business interest being protected is not really the physical...
