Existing law limits the enforceability of noncompetition agreements against employees under certain circumstances. Existing law provides that a noncompetition covenant is void and unenforceable unless the covenant: (1) is supported by valuable consideration; (2) does not impose any restraint that is greater than is required for the protection of the employer for whose benefit the restraint is imposed; (3) does not impose any undue hardship on the employee; and (4) imposes restrictions that are appropriate in relation to the valuable consideration supporting the noncompetition covenant. (NRS 613.195) This bill applies the same restrictions on noncompetition covenants with independent contractors. Existing law similarly provides that a noncompetition covenant may not restrict a former employee of an employer from providing service to a former customer or client under certain circumstances. (NRS 613.195) This bill applies the same provisions to independent contractors. Existing law provides that if the termination of the employment of an employee is the result of a reduction of force, reorganization or similar restructuring of the employer, a noncompetition covenant is only enforceable during the period in which the employer is paying the employee's salary, benefits or equivalent compensation. (NRS 613.195) This bill applies the same provisions to independent contractors.

Statutes affected:
As Introduced: 613.195