When it comes to managing international construction projects, companies partner with local architects, subcontractors and suppliers. However, one aspect of working across borders that can slow down or even derail projects is the varying treatments of non-compete agreements. Here we’ll look at how North Carolina non-compete laws impact these kinds of collaborations as well as providing some wider context for global architecture companies.
Because they’re working with people locally, participating companies hire architects, general contractors and subcontractors for international projects. As architects move from one project location to the next, bits of confidential information are shared with teams that may not have been associated with the company in the past. Locals are frequently hired as subcontractors, which can make it necessary to explain why some confidential information can’t be shared with those people. This is where non-compete clauses become important, especially if they include clear explication of what kind of information the company views as confidential.
North Carolina employees operate under a legal standard that requires any non-compete to be reasonable. Working through various factors like geography and time frame have led to an assumption about non-competes here: it’s alright that your employee works in a specific region for a specific time after leaving your employ, but it’s assumed that the non-competition clause doesn’t overly restrict them. For managers of international construction sites, this means knowing where your company is most likely to encounter problems and explaining these to any North Carolina-based employees before the problem arises.
Every jurisdiction has its own idea of what a non-compete should look like, when it’s acceptable, how long it lasts, etc. Construction site managers don’t go through all of that with local partners, subcontractors and suppliers but that doesn’t make it less necessary to explain your non-compete requirements when making contracts. Otherwise, a court may not uphold your non-compete. Visit (NC) Attorneys Green & Allen, P.A.’s “Understanding Non-Compete Law in North Carolina: The Definitive Guide” to familiarize yourself with the resources available if you’re facing a non-compete contract dispute.
Inconsistent enforcement of non-compete agreements can create problems for any industry. If North Carolina does not allow for a certain non-compete clause, but a European country does, this could create problems whenever your current North Carolina team tries to manage a project in Europe. It also might highlight the issues with an active international competition among construction companies to attract architects, subcontractors and suppliers.
To go with the other example, European regulations may not allow the company to have a non-compete clause in Ohio, for instance, because they consider it an undue restriction on employees and therefore unlawful. What happens when those Ohio employees try to participate in a project? This is why having good local counsel is essential; the issues that arise aren’t often obvious at the project outset but can have devastating consequences if you don’t understand them.
With a construction company, what’s happening is working toward a series of deliverables, which means hiring people to go along with appropriately-named “deliverables.” Architects, contractors, subcontractors and suppliers are crucial to the overall project. Employees who use company records to solicit business from the clients your company has already served, might be acting against your company’s interests. Given that the international construction situation involves acts of collaboration with local parties, making your non-compete clause clearly defined is much more crucial than it might be otherwise.
The thing about expanding into other jurisdictions is that it’s going to come with a list of very specific risks, obligations and benefits to adhering to the local law. A clause that’s difficult for the individual but upholds the intent of the contract can be upheld by North Carolina courts, determining that the contractor is not prohibited from moving to another project location. This extends from the individual situation to the bigger picture, extending your construction projects internationally without running afoul of the law.
The challenge for many businesses is figuring out what’s lawful in one jurisdiction versus another. It falls to the project manager to ensure proper training of their team(s) and that they understand how to adhere to their individual contracts while still working toward the overall project goals. International projects can be a lot of fun, but they’re also tricky; the better you understand how North Carolina non-compete laws work, the smoother it will go.
For more information on non-compete agreements, you can visit the Wikipedia page on non-compete clauses.
