How Can A Covenant Not To Compete Protect Business?

competitor is able to provide, either a firm would have to be protected by a barrier that

Michigan has adopted the Antitrust Reform Act. Mich. Comp. Laws Ann. § 445.774a. The Act allows employers to obtain agreements , protecting their reasonable competitive business interests by prohibiting employment with competitors. Id. But the agreement must be reasonable “as to its duration, geographical area, and the type of employment or line of business.”Id. To be reasonable, a restrictive covenant must “‘protect against the employee’s gaining some unfair advantage in competition with the employer, but not prohibit the employee from using general knowledge or skill.’” Coates v. Bastian Brothers, Inc, 276 Mich. App. 498, 741 N.W.2d 539  (2007) If the agreement is found to be unreasonable, a court may “limit the agreement to

Businesses are not only faced with competition within the industry they operate in. They also face competition from businesses in other industries.

The first antitrust law passed by Congress was the Sherman Act, in 1890. In 1914, Congress passed two other antitrust laws: The Federal Trade Commission Act, which created the Federal Trade Commission, and the Clayton Act. With some revisions, these are the most important federal antitrust laws still in effect today. Section 7 of the Clayton Act prohibits mergers and acquisitions when the effect "may be substantially to lessen competition, or to tend to create a monopoly." (ftc.gov) The antitrust laws proscribe unlawful mergers and business practices in general terms, leaving courts to decide which ones are illegal based on the facts of each case. For over 100 years, the antitrust laws have had the same basic objective: to protect the process of competition for the benefit of consumers, making sure there are strong incentives for businesses to operate efficiently, keep prices down, and keep quality up. The enforcement authorities of the federal antitrust laws are The Federal Trade Commission and the U.S. Department of Justice (DOJ) Antitrust Division (ftc.gov).

The role of antitrust laws has been the subject of numerous publications that have attempted to provide a precise set of reasons and inspirations for their creation. However, there are still many schools of thought on the subject and much debate over the effectiveness and legitimate implementation of these laws. This paper analyzes the three main antitrust laws that the federal branch of the United States government uses to try to restrict monopolies. This paper also looks at antitrust laws in the modern business environment, and attempts to relay the information in a manner that a newcomer to the subject will understand the concept as it relates to modern technology and business practices. The findings of this paper indicate that the topic of antitrust laws is more complex than many believe and, depending on the position of the person affected by monopolies, the sentiment ranges widely.

1. NON-COMPETE COVENANT. During employment and for a period of 2 years after initial day of employment at Saving American Hearts LLC, and after the separation of employment for any reason,____________________ will not directly or indirectly engage in any buisness with the following competitor(s):

One law, which helps protect businesses and promotes fair competition for the benefit of the consumers, is the US Anti-Trust law. This law is comprised of three different acts: The Sherman Act 1890, the Clayton Act 1914 and the Federal Trade Commission Act 1914. The first role these acts perform is to restrict the formation of cartels which would perform outside of the guidelines of the government and there for not be bound by there laws. The second role these acts perform is to ensure no single business entity can perform a certain level of mergers and acquisitions, which would essentially turn them into a monopoly and reduce competition. Overall, the antitrust laws are constantly debated for their overall functionality and efficiency in protecting the fair business practices of the United States. [2] “One view, mostly closely associated with the "Chicago School of economics" suggests that antitrust laws should focus solely on the benefits to consumers and overall efficiency, while a broad range of

On the other hand, California Business and Professions Code section 16600 provides that “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” California courts disfavor covenants that restrain competition. Hill Medical Corp. v. Wycoff, 86 Cal. App. 4th 895 (2001). In California, a non-compete agreement is enforceable only if someone sells a business and agrees not to compete with the new

Restrictive Covenants: It refers to the ability to impose restrictions on an employee by an employer regarding what he cannot do during and after his course of employment. Three types of restrictive covenants are: 1. Non-disclosure clauses prevent former employees from using and disclosing confidential information relating to the employer. 2. Non-solicitation clauses prevent former employees from attracting customers, clients and sometimes employees of employer. 3. Non-competition clause prevent former employees from competing with employer after his employment for a specific period. These clauses are vital to add into contract in order to improve its value.

Competition being one of the major issues that often must be addressed in the business world, it is important for a firm to learn on ways to reduce the impact of the competition. Competition is definitely an important factor in helping a business

This section will touch upon legality of purpose. Certainly, businesses often have a valid concern regarding employees who serve out their contract or are employed at will who then scurry off to a competing company and potentially divulge sensitive information and/or use said information against the prior employer. This can occur with a pre-existing competing company or it can be a solo venture of the person who is taking advantage of the trade secrets or other privileged information. For that reason, employers often

Existing Competitors. Rivalry among competitors within an industry use price discounting, new products, marketing, and other techniques to be competitive. Profitability of an industry suffers from high rivalry. The intensity with which companies compete and the basis on which they compete determine to which degree rivalry brings down an industry’s profitability (Porter, 2008). Pure competition is considered by economists as a competition with a high

Competitive rivalry exists between companies with the same or similar products/services and similar markets. Factors to be considered include:

do not ignore that with which you compete, or that which can devalue your company, especially if in the same market.

51]. The model suggests a successful businesses strategy to wart-off competition by careful application of an “environmental analysis”. The Porter model proposes five elemental strategic defenses against five potential forces: threat of new entrants, rivalry among competitive firms, bargaining power of suppliers, bargaining power of buyers, and the threat of substitution products.