Kentucky High Court Nixes Non-Compete Supported Only By Continued Employment

The Kentucky Supreme Court has held that continued employment alone is not valid consideration for non-compete agreements. In Charles T. Creech, Inc. v. Brown, 2014 Ky. LEXIS 233 (Ky. 2014), Donald E. Brown was employed by Charles T. Creech, Inc. for over 18 years before he was asked to sign a non-compete agreement in 2006. When the company’s owner presented the agreement to Brown, the owner stated that Brown needed to sign it in order to “get [the owner’s] daughter off our backs,” but no one told Brown that his continued employment was contingent on signing the agreement, and he received no other consideration for signing. The employer argued that Brown’s continued employment was valid consideration for the non-compete agreement, and relied on two cases in which the Kentucky Supreme Court had held continued employment to be valid consideration. The Kentucky Supreme Court disagreed and distinguished both of those decisions, explaining that in both cases factors other than continued employment were present that constituted consideration.