Nevada § 613.195 - Noncompetition covenants: Limitations; enforceability; revision by court; award to prevailing party

§ 613.195. Noncompetition covenants: Limitations; enforceability; revision by court; award to prevailing party

1. A noncompetition covenant is void and unenforceable unless the noncompetition covenant: (a) Is supported by valuable consideration; (b) Does not impose any restraint that is greater than is required for the protection

of the employer for whose benefit the restraint is imposed; (c) Does not impose any undue hardship on the employee; and (d) Imposes restrictions that are appropriate in relation to the valuable consideration

supporting the noncompetition covenant. 2. A noncompetition covenant may not restrict, and an employer may not bring an action

to restrict, a former employee of an employer from providing service to a former customer

or client if: (a) The former employee did not solicit the former customer or client; (b) The customer or client voluntarily chose to leave and seek services from the former

employee; and (c) The former employee is otherwise complying with the limitations in the covenant

as to time, geographical area and scope of activity to be restrained, other than any

limitation on providing services to a former customer or client who seeks the services

of the former employee without any contact instigated by the former employee. Any provision in a noncompetition covenant which violates the provisions of this subsection

is void and unenforceable. 3. A noncompetition covenant may not apply to an employee who is paid solely on an

hourly wage basis, exclusive of any tips or gratuities. 4. An employer in this State who negotiates, executes or attempts to enforce a noncompetition

covenant that is void and unenforceable under this section does not violate the provisions

of NRS 613.200 . 5. If the termination of the employment of an employee is the result of a reduction

of force, reorganization or similar restructuring of the employer, a noncompetition

covenant is only enforceable during the period in which the employer is paying the

employee's salary, benefits or equivalent compensation, including, without limitation,

severance pay. 6. If an employer brings an action to enforce a noncompetition covenant or an employee

brings an action to challenge a noncompetition covenant and the court finds the covenant

is supported by valuable consideration but contains limitations as to time, geographical

area or scope of activity to be restrained that are not reasonable, imposes a greater

restraint than is necessary for the protection of the employer for whose benefit the

restraint is imposed or imposes undue hardship on the employee, the court shall revise

the covenant to the extent necessary and enforce the covenant as revised. Such revisions must cause the limitations contained in the covenant as to time,

geographical area and scope of activity to be restrained to be reasonable, to not

impose undue hardship on the employee and to impose a restraint that is not greater

than is necessary for the protection of the employer for whose benefit the restraint

is imposed. 7. If an employer brings an action to enforce a noncompetition covenant or an employee

brings an action to challenge a noncompetition covenant and the court finds that the

noncompetition covenant applies to an employee described in subsection 3 or that the

employer has restricted or attempted to restrict a former employee in the manner described

in subsection 2, the court shall award the employee reasonable attorney's fees and

costs. Nothing in this subsection shall be construed as prohibiting a court from otherwise

awarding attorney's fees to a prevailing party pursuant to NRS 18.010 . 8. As used in this section: (a) “ Employer ” means every person having control or custody of any employment, place of employment

or any employee. (b) “ Noncompetition covenant ” means an agreement between an employer and employee which, upon termination of the

employment of the employee, prohibits the employee from pursuing a similar vocation

in competition with or becoming employed by a competitor of the employer.