The test for reasonableness of geographic scope for a restrictive covenant is whether it is no greater than fairly required for protection. There is no requirement that a restrictive covenant have some geographic limit to be valid. The requirement is that the geographic scope be reasonable.
When defendant entered plaintiff's employ, he signed an employment contract containing a restrictive covenant. The covenant prohibited defendant from working for a competitor for two years, worldwide. Defendant subsequently left plaintiff's employ and went into the employ of plaintiff's competitor. Plaintiff filed suit for breach of contract and sought a preliminary injunction barring defendant from rendering services for plaintiff's competitor and from using or disclosing plaintiff's trade secrets or other confidential information. The court granted the injunction.
Was the restrictive covenant in defendant’s employment contract, which prohibited him from working for the plaintiff’s competitors for two years, worldwide, valid and enforceable?
Worldwide application of the restrictive covenant was necessary to protect plaintiff's interests. Both plaintiff and its competitors operated on a worldwide basis. Therefore, the covenant was reasonable in terms of geographic scope and was valid and enforceable.