Companies seeking to enforce post-employment restrictive covenants — agreements restricting an individual’s ability to compete with their former employer or solicit its customers or employees — should be aware of current litigation trends surrounding what constitutes “adequate consideration” for a restrictive covenant.
Consideration — the mutual exchange of something of value — is an essential element of an enforceable contract. As with all other contracts, restrictive covenants must be supported by “adequate consideration” to be enforceable.
