Non-Compete Agreements in Nevada: Statutory Framework

Nevada's Non-Compete Statute

Nevada regulates non-compete agreements under NRS 613.195, which was significantly amended in 2017. The statute provides a statutory framework that balances employer interests with employee protections.

Statutory Requirements

Under NRS 613.195, a non-compete is enforceable if it is:

• Supported by valuable consideration
• Not greater than necessary to protect the employer's legitimate business interests
• Not unduly harsh or oppressive
• Reasonable in scope regarding duration, geographic area, and activity restrictions

Key Employee Protections (2017 Amendments)

The 2017 amendments added important protections:

• Terminated employees: If an employee is terminated (fired or laid off), the former employer may only enforce a non-compete if it pays the employee's salary during the restricted period, minus any income the employee earns from new employment. This is a form of mandatory garden leave.
• Judicial revision: If a court finds a non-compete unreasonable, the court must revise the agreement to make it reasonable rather than voiding it.
• Attorney fees: An employee who successfully challenges an unreasonable non-compete may recover attorney fees.

Duration and Geographic Limits

• Duration: Nevada courts evaluate reasonableness in context. One to two years is typically considered reasonable. The 2017 amendments did not set a maximum, but courts apply scrutiny to longer restrictions.
• Geography: Must be tied to the employer's competitive market and the employee's work area. Given Las Vegas and Reno are Nevada's primary economic centers, restrictions must relate to where the employee actually operated.

The Paid Restriction for Terminated Employees

Nevada's requirement that employers pay terminated employees during the restricted period is one of the strongest employee protections in the country. If the employer fails to make these payments, the non-compete becomes unenforceable against the terminated employee.

Red Flags

• Employer enforcing against a terminated employee without paying salary during the restriction
• Duration significantly exceeding two years
• Geographic scope unrelated to the employee's actual work area
• No legitimate business interest identified
• Restrictions on general industry skills

When to Consult a Lawyer

Consider consulting a Nevada employment attorney if you were terminated and your former employer is attempting to enforce a non-compete without paying your salary, if you are evaluating a non-compete in a job offer, or if you believe your restrictions are unreasonable.

This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.