Non-Compete Agreements in South Carolina

By: Attorney Nicholas Quatraro

            Employees in South Carolina often face non-compete agreements in employment contracts. A non-compete agreement is a restrictive covenant that is sometimes included in employment contracts. This restricts an employee from working for a business or starting a business that does the same kind of work as the previous employer. Non-compete agreements are typically enforceable whether the employee voluntarily resigns, or they are fired by their employer.

            The South Carolina Court of Appeals has held that a non-compete agreement is enforceable only if it is (1) supported by valuable consideration; (2) necessary to protect the employer in some legitimate interest; (3) not unduly harsh and oppressive in curtailing the employee’s legitimate efforts to earn a livelihood; and (4) otherwise reasonable from the standpoint of sound public policy.  Baugh v. Columbia Heart Clinic, P.A., 402 S.C. 1, 738 S.E.2d 480 (Ct. App. 2013). The noncompete agreement must also be reasonable in geographic scope, duration in time, and type of work restricted.

            A non-compete agreement that has a duration of one to two years, and includes a certain mile radius, or county radius may be reasonable, whereas a non-compete agreement that has a duration of ten years and includes a state-wide restriction may not be reasonable.*

            Each non-compete agreement is different, and the determination of enforceability is extremely fact specific. I recommend reaching out to an attorney that practices in the area of employment law to review employment contracts and non-compete provisions prior to signing.

            As J. Paul Porter has written in a previous blog post (https://cromerbabb.com/latest-news/), the Federal Trade Commission (“FTC”) proposed a rule that would ban most non-compete agreements in the United States. The proposed rule is not binding at this moment. The FTC is expected to vote on its final rule in April 2024. In the meantime, South Carolina courts will continue to allow non-compete agreements for South Carolinians across the state.

The employment lawyers with Cromer Babb & Porter are available in South Carolina and North Carolina to review noncompete agreements, and to fight for employees who may have entered into an unenforceable non-compete agreement. 

*Disclaimer: No one factor may render a non-compete agreement enforceable or unenforceable. It is best to speak with an attorney regarding the nature of the agreement.

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