By Richard L. Rainey, JD
In North Carolina, initial employment is sufficient consideration to support a noncompete agreement. However, if an individual is already an employee, additional consideration must be provided to support a noncompete. (Consideration is something of value given to an employee for signing the noncompete.)
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Additional consideration often comes in the form of a signing bonus. One of the questions employers frequently ask is, how large must a signing bonus be to serve as adequate consideration?
Facts. Monica Little began working for Employment Staffing Group (ESG) in September 2001. On June 13, 2014, after almost 13 years of employment, she was asked to sign an employment agreement containing a noncompete covenant.
The noncompete prohibited her from working for any competing business within a 50-mile radius of ESG’s base location for 1 year following the termination of her employment. The noncompete contained a nonsolicitation provision that prohibited Little from soliciting ESG’s customers for 2 years following the termination of her employment.