Reference no: EM131451055

Question: Eugene McCarthy began working for Nike in 1993 and was promoted to a footwear sales manager position in 1997. Following his promotion, McCarthy signed a covenant not to compete that stated, "during Employee's employment by Nike and for one (1) year thereafter, Employee will not directly or indirectly be employed by, consult for, or be connected in any manner with, any business engaged anywhere in the world in the athletic footwear, athletic apparel or sports equipment and accessories business, or any other business which directly competes with Nike or any of its subsidiaries or affiliated corporations." In 1999, McCarthy was promoted again, to director of sales for the Brand Jordan division, but he was not required to sign a new noncompete agreement. In the spring of 2003, McCarthy accepted a job at Reebok as vice president of U.S. footwear sales and merchandising, and he resigned from Nike. Once McCarthy began working at Reebok, Nike filed a suit against him, claiming breach of contract and that McCarthy's employment with Reebok violated the covenant not to compete. Is Nike's noncompete agreement "reasonable"? Why or why not?