What is Employer Goodwill?
"Goodwill" is one of the interests an employer may seek to protect through enforcement of a non compete agreement. But what does it mean?
In broad terms, goodwill is the reputation of the business. The reason it is considered a legitimate interest to protect in a non compete is that the business' reputation is often associated with the individuals employed by the business who interact with customers, vendors, and others. Courts consider this situation- where the person who has been seen as the "face" of the company turns up working for a competitor- as a source of legitimate harm to the original employer.
Sometimes whether the goodwill properly belongs to the employer or to the employee is open to question. For example, if the employee has brought their own contacts or "book of business" into the employment relationship, a case could be made that goodwill with those contacts does not belong to the employer.
Learn more here about non-compete agreements and employer goodwill.
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