Question

When Mohammed was hired by Pomico, Inc., he signed the following agreement, "Upon termination of my employment with Pomico, I agree not to work for a competing company within 30 miles of Pomico's headquarters for one year." This agreement, important to protecting secret information developed in the employer's business, is ________.

A)an unenforceable exculpatory agreement.
B) an unenforceable usurious agreement.
C)an enforceable bailment agreement.
D)an enforceable agreement not to compete.

Answer 1

Mohammed signed an enforceable agreement not to compete with Pomico, Inc., which is often protected under the law to safeguard a company's business interests like trade secrets. The enforceability of such agreements can vary and must be reasonable in scope, time, and geographic area to be upheld in court.

Step-by-step explanation:

When Mohammed was hired by Pomico, Inc., and agreed not to work for a competing company within 30 miles of Pomico's headquarters for one year upon termination, he signed an enforceable agreement not to compete. Such agreements are typically enforced when they are reasonable in scope, time, and geographic area, and serve to protect legitimate business interests, such as trade secrets or confidential information.

Non-compete agreements are important in many industries to prevent the likelihood of former employees using insider information to benefit a competitor or to start a business that directly competes with the employer. However, the enforceability of such agreements varies by jurisdiction and can be subject to legal review if challenged in court. It is essential that non-compete clauses do not impose excessive restrictions on an employee's ability to find employment and must be designed to protect the legitimate interests of the employer without overreaching.