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Updated July 29, 2022

A South Carolina non-compete agreement allows an employer to protect a legitimate business interest by restricting their ability to work in the same industry. A non-compete must also balance an employer’s legitimate interests and an employee’s right to use their talents to earn a living.

A non-compete is specifically restricted to a time and place .

Legally Enforceable?

Yes , a non-compete is legally enforceable if the non-compete is:

  • Reasonable in the sense that it is no greater than is necessary to protect the employer’s legitimate business interest;
  • From the standpoint of the employee, the restraint must be reasonable in the sense that it is not unduly harsh and oppressive in curtailing his legitimate efforts to earn a livelihood;
  • Partial or restrictive in its operation, either as to time or place;
  • Supported by valuable consideration; and
  • The restraint is reasonable from the standpoint of a sound public.

Source: Standard Register Co. v. Kerrigan (1961)

Balance Test

The Supreme Court has ruled a non-compete has a balance between the employer protecting themselves and the employee’s right to earn a living .

“While recognizing the legitimate interests of a business in protecting its clientele and goodwill, we are equally concerned with the right of a person to use his talents to earn a living.”

Source: Sermons v. Caine Estes Ins. Agency (1980)

Continued Employment

If a non-compete is presented to an employee after being hired, there must be “ new consideration ” presented such as their position or duties.

“If an employment relationship already exists without a covenant not to compete, any such future covenant must be based upon new consideration.”

Source: Poole v. Incentives Unlimited (1999)

Attorneys (prohibited)

An attorney is prohibited from entering into any type of agreement that restricts their right to practice law.

Source: Rule 5.6 (Restrictions on Right to Practice)

Maximum Term

3 years was deemed “not obnoxious” by the Supreme Court.

Source: Rental Uniform Service of Florence, Inc. v. Dudley (1983)

Blue Penciling

The courts have adopted a “blue pencil test” that disregards excessive restraints found in a non-compete if the agreement is severable. For example, a court is able to strike out unreasonable provisions in a non-compete if it includes a severability clause.

Source: Somerset v. Reyner (1958)