
Quoting
Forrest Paschal Machinery Co. v. Milholen, 27 N.C. App. 678, 220 SE 2d 190, 195 (1975)
By G.S. 75-1, contracts in restraint of trade are made illegal in North Carolina. See also G.S. 75-2 and G.S. 75-4. This State, however, has long recognized the rule that a covenant not to compete is enforceable in equity if it is "(1) in writing, (2) entered into at the time and as a part of the contract of employment, (3) based on valuable considerations, (4) reasonable both as to time and territory embraced in the restrictions, (5) fair to the parties, and (6) not against public policy." Exterminating Co. v. Griffin and Exterminating Co. v. Jones, supra, 258 N.C. at 181, 128 S.E.2d at 141, and cases there cited.
The court found as facts that William was first employed by plaintiff on a permanent basis on 1 February 1966 and that the contract containing the covenant not to compete was executed on or about 23 July 1966. The court further found that he did not receive any promotion or increase in salary at the time of the execution of the covenant not to compete and that thereafter he remained in plaintiff's employ for some 8½ years, received numerous increases in salary and was promoted to the positions of director of engineering, director of sales, and vice-president. There was ample evidence before the court to support these findings. It is clear that, based upon the findings of fact, the covenant not to compete executed by William on 23 July 1966 was not ancillary to a contract of employment nor was it supported by substantial consideration. The court correctly concluded that the covenant not to compete executed by William and plaintiff is not enforceable.