{ "type": "practice-guide", "canonical": "https://openagreements.org/practice-guides/non-compete/us/new-mexico", "links": [ { "rel": "self", "href": "https://openagreements.org/practice-guides/non-compete/us/new-mexico.json", "type": "application/json" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/non-compete/us/new-mexico", "type": "text/html" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/non-compete/us/new-mexico/markdown", "type": "text/markdown" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/non-compete/us/new-mexico/json", "type": "application/json" } ], "data": { "topic": "non-compete", "state": "new-mexico", "frontmatter": { "title": "Non-Competes in New Mexico", "description": "New Mexico enforces ordinary employee non-competes only when they are reasonable and supported by valid consideration, with a statutory ban for covered health-care practitioners.", "state": "New Mexico", "lastReviewed": "2026-06-03", "license": "CC BY 4.0", "authors": [ "steven-obiajulu" ], "summary": { "enforceability": "reasonable", "bottomLine": "New Mexico enforces ordinary employee non-competes only when reasonable and supported by valid consideration, but a statute makes covered health-care practitioner non-competes unenforceable.", "keyLaw": "Lovelace Clinic v. Murphy, 76 N.M. 645 (1966); NMSA 1978, § 24A-4-2", "exceptions": "Health-care practitioner ban (§ 24A-4-2); sale-of-business more lenient", "courtNarrowing": "unsettled", "appliesToContractors": "n/a", "extendedForBreach": "Open question — no authority", "maxLength": "No statutory limit", "noticeRequirement": "None", "incomeThreshold": "None", "saleOfBusiness": "Sale covenants enforced more readily than employment covenants if reasonable", "customerNonSolicit": "Enforceable if reasonable, ≤1 yr (health-care)", "employeeNonSolicit": "Enforceable if reasonable, ≤1 yr (health-care)" }, "about": [ "New Mexico non-compete agreements", "New Mexico restrictive covenants", "Lovelace Clinic reasonableness test", "Piano continued at-will employment consideration rule", "KidsKare contract-based reformation", "New Mexico health-care practitioner non-compete ban", "New Mexico Uniform Trade Secrets Act" ], "translations": [ { "language": "中文", "status": "planned" }, { "language": "Español", "status": "planned" }, { "language": "Português", "status": "planned" }, { "language": "Deutsch", "status": "planned" } ], "relatedForm": { "slug": "openagreements-restrictive-covenant-new-mexico" } }, "questions": [ { "slug": "employee-non-compete-enforceability", "label": "Are employee non-competes enforceable?", "heading": "Are employee non-compete agreements enforceable in New Mexico?", "answerText": "Yes, sometimes. New Mexico is a common-law reasonableness state for ordinary employee non-competes: the covenant must be reasonable in time, geography, and scope, and it must be tied to a legitimate business interest rather than a naked restraint on work.", "sources": [ { "id": "lovelace-reasonableness-test", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Lovelace Clinic v. Murphy", "citation": "Lovelace Clinic v. Murphy, 76 N.M. 645, 417 P.2d 450 (1966).", "url": "https://www.courtlistener.com/opinion/1196089/lovelace-clinic-v-murphy/", "deepLink": "https://www.courtlistener.com/opinion/1196089/lovelace-clinic-v-murphy/#:~:text=All%20of%20the%20physician%20and,or%20the%20associate%20are%20reasonable.", "proposition": "Lovelace supports New Mexico's common-law rule that restrictive covenants in employment or professional association agreements can be enforced when the restrictions are reasonable.", "verbatimQuote": "All of the physician and surgeon cases either expressly hold or clearly indicate that the rights and duties created by the contract of employment or association are enforceable, if the restrictions thus imposed on the employee or the associate are reasonable.", "date": "1966-08-22", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-lovelace-reasonableness-test" }, { "id": "mcgonigle-ordinary-enforceability", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Insure New Mexico, LLC v. McGonigle", "citation": "Insure New Mexico, LLC v. McGonigle, 2000-NMCA-018, 995 P.2d 1053.", "url": "https://www.courtlistener.com/opinion/1291299/insure-new-mexico-llc-v-mcgonigle/", "deepLink": "https://www.courtlistener.com/opinion/1291299/insure-new-mexico-llc-v-mcgonigle/#:~:text=Non%2Dcompetition%20covenants%20are%20ordinarily%20enforceable,a%20court%20deems%20them%20reasonable.", "proposition": "McGonigle restates that New Mexico non-competes are ordinarily enforceable if a court deems them reasonable.", "verbatimQuote": "Non-competition covenants are ordinarily enforceable as long as a court deems them reasonable.", "date": "2000-02-11", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-mcgonigle-ordinary-enforceability" }, { "id": "lovelace-public-interest", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Lovelace Clinic v. Murphy", "citation": "Lovelace Clinic v. Murphy, 76 N.M. 645, 417 P.2d 450 (1966).", "url": "https://www.courtlistener.com/opinion/1196089/lovelace-clinic-v-murphy/", "deepLink": "https://www.courtlistener.com/opinion/1196089/lovelace-clinic-v-murphy/#:~:text=The%20public%20has%20an%20interest,enforcing%20contractual%20rights%20and%20obligations.", "proposition": "Lovelace frames the public-policy balance between avoiding unreasonable restraints and enforcing contractual obligations.", "verbatimQuote": "The public has an interest in seeing that competition is not unreasonably limited or restricted, but it also has an interest in protecting the freedom of persons to contract, and in enforcing contractual rights and obligations.", "date": "1966-08-22", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-lovelace-public-interest" }, { "id": "bowen-facts-particular-case-practice", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Bowen v. Carlsbad Insurance & Real Estate, Inc.", "citation": "Bowen v. Carlsbad Ins. & Real Estate, Inc., 104 N.M. 514, 724 P.2d 223 (1986).", "url": "https://www.courtlistener.com/opinion/1211410/bowen-v-carlsbad-insurance-real-estate-inc/", "deepLink": "https://www.courtlistener.com/opinion/1211410/bowen-v-carlsbad-insurance-real-estate-inc/#:~:text=Whether%20there%20is%20a%20reasonable,for%20the%20courts%20to%20decide.", "proposition": "Bowen supports evaluating reasonableness based on the facts of the particular case rather than fixed numerical caps.", "verbatimQuote": "Whether there is a reasonable restraint depends on the facts of a particular case, D. W. Trowbridge Ford, Inc. v. Galyen, 200 Neb. 103, 106 , 262 N.W.2d 442, 445 (1978), and is a matter of law for the courts to decide.", "date": "1986-08-27", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-bowen-facts-particular-case-practice" }, { "id": "mcgonigle-general-skills-practice", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Insure New Mexico, LLC v. McGonigle", "citation": "Insure New Mexico, LLC v. McGonigle, 2000-NMCA-018, 995 P.2d 1053.", "url": "https://www.courtlistener.com/opinion/1291299/insure-new-mexico-llc-v-mcgonigle/", "deepLink": "https://www.courtlistener.com/opinion/1291299/insure-new-mexico-llc-v-mcgonigle/#:~:text=General%20skills%20and%20knowledge%20do,the%20level%20of%20trade%20secrets.", "proposition": "McGonigle supports that an employee's general skills and knowledge are not trade secrets.", "verbatimQuote": "General skills and knowledge do not rise to the level of trade secrets.", "date": "2000-02-11", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-mcgonigle-general-skills-practice" } ] }, { "slug": "consideration", "label": "Is continued employment enough consideration?", "heading": "Is continued at-will employment enough consideration for a New Mexico non-compete?", "answerText": "Probably not by itself for an existing at-will employee. Piano v. Premier Distributing Co. was an arbitration-agreement case, not a non-compete case, but it states New Mexico's general consideration rule: continued at-will employment is an illusory promise and cannot supply consideration.", "sources": [ { "id": "piano-continued-employment-illusory", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Piano v. Premier Distributing Co.", "citation": "Piano v. Premier Distrib. Co., 2005-NMCA-018, 107 P.3d 11.", "url": "https://www.courtlistener.com/opinion/2509475/piano-v-premier-distributing-co/", "deepLink": "https://www.courtlistener.com/opinion/2509475/piano-v-premier-distributing-co/#:~:text=Continued%20at%2Dwill%20employment%20is%20an,promise%20that%20cannot%20be%20consideration.", "proposition": "Piano states New Mexico's general consideration rule that continued at-will employment is illusory and cannot be consideration.", "verbatimQuote": "Continued at-will employment is an illusory promise that cannot be consideration.", "date": "2004-12-20", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-piano-continued-employment-illusory" }, { "id": "piano-no-constraints", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Piano v. Premier Distributing Co.", "citation": "Piano v. Premier Distrib. Co., 2005-NMCA-018, 107 P.3d 11.", "url": "https://www.courtlistener.com/opinion/2509475/piano-v-premier-distributing-co/", "deepLink": "https://www.courtlistener.com/opinion/2509475/piano-v-premier-distributing-co/#:~:text=The%20implied%20promise%20of%20continued,at%2Dwill%20employment%20was%20entirely%20discretionary.", "proposition": "Piano explains why continued at-will employment is illusory: the employer's decision to continue employment placed no constraint on future conduct.", "verbatimQuote": "The implied promise of continued at-will employment placed no constraints on Defendant’s future conduct; its decision to continue Plaintiffs at-will employment was entirely discretionary.", "date": "2004-12-20", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-piano-no-constraints" }, { "id": "piano-contract-elements", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Piano v. Premier Distributing Co.", "citation": "Piano v. Premier Distrib. Co., 2005-NMCA-018, 107 P.3d 11.", "url": "https://www.courtlistener.com/opinion/2509475/piano-v-premier-distributing-co/", "deepLink": "https://www.courtlistener.com/opinion/2509475/piano-v-premier-distributing-co/#:~:text=A%20legally%20enforceable%20contract%20requires,acceptance%2C%20consideration%2C%20and%20mutual%20assent.%E2%80%9D", "proposition": "Piano states the contract-formation elements that frame New Mexico consideration analysis.", "verbatimQuote": "A legally enforceable contract requires evidence supporting the existence of “an offer, an acceptance, consideration, and mutual assent.”", "date": "2004-12-20", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-piano-contract-elements" }, { "id": "piano-contract-never-formed", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Piano v. Premier Distributing Co.", "citation": "Piano v. Premier Distrib. Co., 2005-NMCA-018, 107 P.3d 11.", "url": "https://www.courtlistener.com/opinion/2509475/piano-v-premier-distributing-co/", "deepLink": "https://www.courtlistener.com/opinion/2509475/piano-v-premier-distributing-co/#:~:text=Because%20we%20conclude%20that%20the,a%20contract%20was%20never%20formed.", "proposition": "Piano supports the drafting risk that an agreement unsupported by consideration is not formed.", "verbatimQuote": "Because we conclude that the agreement is not supported by consideration, a contract was never formed.", "date": "2004-12-20", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-piano-contract-never-formed" } ] }, { "slug": "protectable-interests", "label": "What interests are protectable?", "heading": "What legitimate business interests can support a New Mexico non-compete?", "answerText": "Specific proprietary interests can support a tailored restraint, especially confidential information and trade secrets. An employee's general skills and knowledge are not enough.", "sources": [ { "id": "mcgonigle-general-skills", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Insure New Mexico, LLC v. McGonigle", "citation": "Insure New Mexico, LLC v. McGonigle, 2000-NMCA-018, 995 P.2d 1053.", "url": "https://www.courtlistener.com/opinion/1291299/insure-new-mexico-llc-v-mcgonigle/", "deepLink": "https://www.courtlistener.com/opinion/1291299/insure-new-mexico-llc-v-mcgonigle/#:~:text=General%20skills%20and%20knowledge%20do,the%20level%20of%20trade%20secrets.", "proposition": "McGonigle supports that an employee's general skills and knowledge are not trade secrets.", "verbatimQuote": "General skills and knowledge do not rise to the level of trade secrets.", "date": "2000-02-11", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-mcgonigle-general-skills" }, { "id": "mcgonigle-not-special", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Insure New Mexico, LLC v. McGonigle", "citation": "Insure New Mexico, LLC v. McGonigle, 2000-NMCA-018, 995 P.2d 1053.", "url": "https://www.courtlistener.com/opinion/1291299/insure-new-mexico-llc-v-mcgonigle/", "deepLink": "https://www.courtlistener.com/opinion/1291299/insure-new-mexico-llc-v-mcgonigle/#:~:text=For%20this%20reason%2C%20there%20was,did%20not%20require%20special%20information.", "proposition": "McGonigle supports denying trade-secret protection where customer needs and characteristics were not peculiar and did not require special information.", "verbatimQuote": "For this reason, there was substantial evidence supporting the trial court’s finding that the particular needs or characteristics of Plaintiffs customers were not peculiar and did not require special information.", "date": "2000-02-11", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-mcgonigle-not-special" }, { "id": "utsa-trade-secret-definition", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "NMSA 1978, § 57-3A-2", "citation": "NMSA 1978, § 57-3A-2(D).", "url": "https://nmonesource.com/nmos/nmsa/en/4423/1/document.do", "proposition": "Section 57-3A-2 defines a New Mexico trade secret by economic value from secrecy and reasonable secrecy efforts.", "verbatimQuote": "\"trade secret\" means information, including a formula, pattern, compilation, program, device, method, technique or process, that: (1) derives independent economic value, actual or potential, from not being generally known to and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use; and (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-utsa-trade-secret-definition" }, { "id": "utsa-injunction", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "NMSA 1978, § 57-3A-3", "citation": "NMSA 1978, § 57-3A-3(A).", "url": "https://nmonesource.com/nmos/nmsa/en/4423/1/document.do", "proposition": "Section 57-3A-3 authorizes injunctive relief for actual or threatened trade-secret misappropriation.", "verbatimQuote": "Actual or threatened misappropriation may be enjoined.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-utsa-injunction" } ] }, { "slug": "duration-limits", "label": "How much time and territory are reasonable?", "heading": "What duration and geographic scope are reasonable for a New Mexico non-compete?", "answerText": "There is no general statutory cap. New Mexico courts evaluate time and territory under a facts-and-circumstances reasonableness test, looking at the business, the market, the parties, the protectable interest, and public impact.", "sources": [ { "id": "bowen-facts-particular-case", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Bowen v. Carlsbad Insurance & Real Estate, Inc.", "citation": "Bowen v. Carlsbad Ins. & Real Estate, Inc., 104 N.M. 514, 724 P.2d 223 (1986).", "url": "https://www.courtlistener.com/opinion/1211410/bowen-v-carlsbad-insurance-real-estate-inc/", "deepLink": "https://www.courtlistener.com/opinion/1211410/bowen-v-carlsbad-insurance-real-estate-inc/#:~:text=Whether%20there%20is%20a%20reasonable,for%20the%20courts%20to%20decide.", "proposition": "Bowen supports evaluating reasonableness based on the facts of the particular case rather than fixed numerical caps.", "verbatimQuote": "Whether there is a reasonable restraint depends on the facts of a particular case, D. W. Trowbridge Ford, Inc. v. Galyen, 200 Neb. 103, 106 , 262 N.W.2d 442, 445 (1978), and is a matter of law for the courts to decide.", "date": "1986-08-27", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-bowen-facts-particular-case" }, { "id": "kidskare-facts-reformed-limits", "authorityType": "case-law", "tier": "primary-source-backed", "title": "KidsKare, P.C. v. Mann", "citation": "KidsKare, P.C. v. Mann, 2015-NMCA-064, 350 P.3d 1228.", "url": "https://www.courtlistener.com/opinion/2789328/kidskare-v-mann/", "deepLink": "https://www.courtlistener.com/opinion/2789328/kidskare-v-mann/#:~:text=As%20its%20remedy%2C%20the%20district,the%20covenant%20was%20thus%20enforceable.", "proposition": "KidsKare illustrates a district court reducing an overbroad dental covenant's geographic restriction from one hundred miles to thirty miles.", "verbatimQuote": "As its remedy, the district court reformed the 9 distance provision of clause one by reducing the radius to thirty miles, finding that 10 the covenant was thus enforceable.", "date": "2015-03-25", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-kidskare-facts-reformed-limits" }, { "id": "lovelace-time-area", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Lovelace Clinic v. Murphy", "citation": "Lovelace Clinic v. Murphy, 76 N.M. 645, 417 P.2d 450 (1966).", "url": "https://www.courtlistener.com/opinion/1196089/lovelace-clinic-v-murphy/", "deepLink": "https://www.courtlistener.com/opinion/1196089/lovelace-clinic-v-murphy/#:~:text=The%20limitations%20as%20to%20time,the%20A.L.R.%20annotations.%20%E2%80%A2%20%E2%96%A0", "proposition": "Lovelace upheld the physician covenant's time and area limits as reasonable under the facts.", "verbatimQuote": "The limitations as to time and area in the covenant under consideration are clearly within the limitations upheld in the many 'cases above' cited and referred 'to in the A.L.R. annotations. • ■", "date": "1966-08-22", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-lovelace-time-area" }, { "id": "bowen-sale-more-deference", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Bowen v. Carlsbad Insurance & Real Estate, Inc.", "citation": "Bowen v. Carlsbad Ins. & Real Estate, Inc., 104 N.M. 514, 724 P.2d 223 (1986).", "url": "https://www.courtlistener.com/opinion/1211410/bowen-v-carlsbad-insurance-real-estate-inc/", "deepLink": "https://www.courtlistener.com/opinion/1211410/bowen-v-carlsbad-insurance-real-estate-inc/#:~:text=Courts%20are%20more%20reluctant%20to,than%20those%20in%20employment%20contracts.", "proposition": "Bowen supports treating sale-of-business restraints more deferentially than employment restraints.", "verbatimQuote": "Courts are more reluctant to disturb restrictive covenants in buy-sell agreements than those in employment contracts.", "date": "1986-08-27", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-bowen-sale-more-deference" }, { "id": "bowen-sale-valid", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Bowen v. Carlsbad Insurance & Real Estate, Inc.", "citation": "Bowen v. Carlsbad Ins. & Real Estate, Inc., 104 N.M. 514, 724 P.2d 223 (1986).", "url": "https://www.courtlistener.com/opinion/1211410/bowen-v-carlsbad-insurance-real-estate-inc/", "deepLink": "https://www.courtlistener.com/opinion/1211410/bowen-v-carlsbad-insurance-real-estate-inc/#:~:text=It%20is%20well%2Dsettled%20that%20a,a%20sale%20of%20a%20business.", "proposition": "Bowen states the New Mexico rule that sale-of-business restrictive covenants are valid when within reasonable time and space limits.", "verbatimQuote": "It is well-settled that a restrictive covenant is valid if it is within reasonable limits of time and space and ancillary to a sale of a business.", "date": "1986-08-27", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-bowen-sale-valid" } ] }, { "slug": "court-narrowing", "label": "Will New Mexico courts narrow overbroad covenants?", "heading": "Will a New Mexico court narrow or reform an overbroad non-compete?", "answerText": "Sometimes, but do not assume an inherent blue-pencil power. KidsKare upheld modification because the parties' agreement expressly authorized amendment of an unenforceable provision and enforcement to the maximum reasonable extent.", "sources": [ { "id": "kidskare-contract-reformation", "authorityType": "case-law", "tier": "primary-source-backed", "title": "KidsKare, P.C. v. Mann", "citation": "KidsKare, P.C. v. Mann, 2015-NMCA-064, 350 P.3d 1228.", "url": "https://www.courtlistener.com/opinion/2789328/kidskare-v-mann/", "deepLink": "https://www.courtlistener.com/opinion/2789328/kidskare-v-mann/#:~:text=We%20hold%20that%2C%20contrary%20to,by%20the%20reviewing%2014%20court.", "proposition": "KidsKare upheld modification because the contract explicitly authorized amendment of unenforceable provisions and enforcement to the reasonable extent.", "verbatimQuote": "We hold that, contrary to the argument of Dr. Mann, the 11 covenant not to compete was amenable to modification by the district court because 12 the agreement explicitly provided for amendment of any unenforceable provision and 13 enforcement to the full extent deemed reasonable and enforceable by the reviewing 14 court.", "date": "2015-03-25", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-kidskare-contract-reformation" }, { "id": "kidskare-bargained-reformation", "authorityType": "case-law", "tier": "primary-source-backed", "title": "KidsKare, P.C. v. Mann", "citation": "KidsKare, P.C. v. Mann, 2015-NMCA-064, 350 P.3d 1228.", "url": "https://www.courtlistener.com/opinion/2789328/kidskare-v-mann/", "deepLink": "https://www.courtlistener.com/opinion/2789328/kidskare-v-mann/#:~:text=Reformation%20of%205%20unreasonable%20clauses,expressed%20by%20the%20employment%20agreement.", "proposition": "KidsKare grounds reformation in the parties' bargain and mutual intent as expressed in the employment agreement.", "verbatimQuote": "Reformation of 5 unreasonable clauses was an aspect of the bargain of the parties and consistent with 6 their mutual intent as expressed by the employment agreement.", "date": "2015-03-25", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-kidskare-bargained-reformation" }, { "id": "kidskare-no-general-ruling", "authorityType": "case-law", "tier": "primary-source-backed", "title": "KidsKare, P.C. v. Mann", "citation": "KidsKare, P.C. v. Mann, 2015-NMCA-064, 350 P.3d 1228.", "url": "https://www.courtlistener.com/opinion/2789328/kidskare-v-mann/", "deepLink": "https://www.courtlistener.com/opinion/2789328/kidskare-v-mann/#:~:text=Because%20we%20conclude%20that%20an,regarding%20New%20Mexico%20case%20law.", "proposition": "KidsKare did not decide whether New Mexico case law independently authorizes broader blue-pencil reformation.", "verbatimQuote": "Because we conclude that an alternative basis to alter the covenant not to 6 compete allows for disposition of this case, we do not reach Defendant’s argument 7 regarding New Mexico case law.", "date": "2015-03-25", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-kidskare-no-general-ruling" } ] }, { "slug": "extended-for-breach", "label": "Does New Mexico toll a non-compete?", "heading": "Does a New Mexico non-compete toll or extend during breach or litigation?", "answerText": "This is an open New Mexico question. The staged New Mexico non-compete cases and statutes do not squarely say that a court may automatically toll or extend a non-compete's restricted period while the former employee is allegedly breaching or while litigation is pending.", "sources": [ { "id": "q6-lovelace-fixed-period", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Lovelace Clinic v. Murphy", "citation": "Lovelace Clinic v. Murphy, 76 N.M. 645, 417 P.2d 450 (1966).", "url": "https://www.courtlistener.com/opinion/1196089/lovelace-clinic-v-murphy/", "deepLink": "https://www.courtlistener.com/opinion/1196089/lovelace-clinic-v-murphy/#:~:text=At%20the%20conclusion%20of%20the,and%20including%20January%2031%2C%201967.", "proposition": "Lovelace illustrates enforcement of a fixed restricted period without announcing a tolling rule.", "verbatimQuote": "At the conclusion of the trial, judgínént was entered for the clinic restraining;.^nd enjoining Dr. Murphy from practicing viped-i-, icine, directly or indirectly, in Bernalillo, County from November 29, 1965, the .date, of the judgment, to and including January 31, 1967.", "date": "1966-08-22", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-q6-lovelace-fixed-period" }, { "id": "q6-kidskare-fixed-period", "authorityType": "case-law", "tier": "primary-source-backed", "title": "KidsKare, P.C. v. Mann", "citation": "KidsKare, P.C. v. Mann, 2015-NMCA-064, 350 P.3d 1228.", "url": "https://www.courtlistener.com/opinion/2789328/kidskare-v-mann/", "deepLink": "https://www.courtlistener.com/opinion/2789328/kidskare-v-mann/#:~:text=As%20reformed%20by%20the%20district,compete%20was%20reasonable%20and%20enforceable.", "proposition": "KidsKare illustrates enforcement of a reformed one-year and thirty-mile restraint without announcing a tolling rule.", "verbatimQuote": "As reformed by the district 7 court, the covenant not to compete was reasonable and enforceable.", "date": "2015-03-25", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-q6-kidskare-fixed-period" } ] }, { "slug": "health-care-practitioners", "label": "Which New Mexico workers have special limits?", "heading": "Which New Mexico workers have special non-compete limits?", "answerText": "Covered health-care practitioners have the major New Mexico statutory limit. A non-compete that restricts a covered practitioner's right to provide clinical health-care services in New Mexico is unenforceable when the agreement, renewal, extension, or employment ends.", "sources": [ { "id": "healthcare-ban", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "NMSA 1978, § 24A-4-2", "citation": "NMSA 1978, § 24A-4-2(A).", "url": "https://nmonesource.com/nmos/nmsa/en/18973/1/document.do", "proposition": "Section 24A-4-2 makes covered health-care practitioner non-competes unenforceable when they restrict clinical health-care services in New Mexico after the covered relationship ends.", "verbatimQuote": "A non-compete provision in an agreement, which provision restricts the right of a health care practitioner to provide clinical health care services in this state, shall be unenforceable upon the termination of: (1) the agreement; (2) a renewal or extension of the agreement; or (3) a health care practitioner's employment with a party seeking to enforce the agreement.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-healthcare-ban" }, { "id": "healthcare-covered-practitioners", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "NMSA 1978, § 24A-4-1", "citation": "NMSA 1978, § 24A-4-1(B).", "url": "https://nmonesource.com/nmos/nmsa/en/18973/1/document.do", "proposition": "Section 24A-4-1 defines the covered health-care practitioners.", "verbatimQuote": "\"health care practitioner\" means: (1) a dentist; (2) an osteopathic physician; (3) a physician; (4) a podiatrist; (5) a certified registered nurse anesthetist; (6) a certified nurse practitioner; (7) a certified nurse-midwife; (8) a psychologist; (9) a physician assistant; and (10) a pharmacist.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-healthcare-covered-practitioners" }, { "id": "healthcare-effective-dates", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "NMSA 1978, § 24A-4-5", "citation": "NMSA 1978, § 24A-4-5(D).", "url": "https://nmonesource.com/nmos/nmsa/en/18973/1/document.do", "proposition": "Section 24A-4-5 states effective-date rules, including the 2023 expansion for psychologists, physician assistants, and pharmacists.", "verbatimQuote": "For psychologists, physician assistants and pharmacists, the provisions of Chapter 24, Article 1I NMSA 1978 [Chapter 24A, Article 4 NMSA 1978] apply to agreements, or renewals or extensions of agreements, executed on or after the effective date of this 2023 act.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-healthcare-effective-dates" }, { "id": "healthcare-repayment", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "NMSA 1978, § 24A-4-3", "citation": "NMSA 1978, § 24A-4-3(A).", "url": "https://nmonesource.com/nmos/nmsa/en/18973/1/document.do", "proposition": "Section 24A-4-3 preserves certain repayment provisions for practitioners employed for an initial period of less than three years.", "verbatimQuote": "Nothing in this act shall be construed to limit the enforceability of: A. a provision in an agreement requiring a health care practitioner who has worked for an employer for an initial period of less than three years to repay all or a portion of: (1) a loan; (2) relocation expenses; (3) a signing bonus or other remuneration to induce the health care practitioner to relocate or establish a health care practice in a specified geographic area; or (4) recruiting, education and training expenses;", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-healthcare-repayment" }, { "id": "healthcare-nda-nonsolicit", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "NMSA 1978, § 24A-4-3", "citation": "NMSA 1978, § 24A-4-3.", "url": "https://nmonesource.com/nmos/nmsa/en/18973/1/document.do", "proposition": "Section 24A-4-3 preserves NDAs, one-year-or-less patient and employee non-solicits, and other lawful provisions.", "verbatimQuote": "Nothing in this act shall be construed to limit the enforceability of: A. a provision in an agreement requiring a health care practitioner who has worked for an employer for an initial period of less than three years to repay all or a portion of: (1) a loan; (2) relocation expenses; (3) a signing bonus or other remuneration to induce the health care practitioner to relocate or establish a health care practice in a specified geographic area; or (4) recruiting, education and training expenses; B. a nondisclosure provision relating to confidential information and trade secrets; C. a nonsolicitation provision with respect to patients and employees of the party seeking to enforce the agreement for a period of one year or less after the last date of employment; or D. any other provision of an agreement that is not in violation of law, including a provision for liquidated damages.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-healthcare-nda-nonsolicit" }, { "id": "healthcare-liquidated-damages", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "NMSA 1978, § 24A-4-4", "citation": "NMSA 1978, § 24A-4-4(A).", "url": "https://nmonesource.com/nmos/nmsa/en/18973/1/document.do", "proposition": "Section 24A-4-4 permits reasonable liquidated damages and voids unreasonably large liquidated damages as a penalty.", "verbatimQuote": "An agreement may provide for liquidated damages in an amount that is reasonable at the time the agreement is executed and in light of anticipated harm and difficulty of proving the amount of loss resulting from breach of the agreement by any party.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-healthcare-liquidated-damages" }, { "id": "healthcare-choice-law-venue", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "NMSA 1978, § 24A-4-2", "citation": "NMSA 1978, § 24A-4-2(B).", "url": "https://nmonesource.com/nmos/nmsa/en/18973/1/document.do", "proposition": "Section 24A-4-2 voids foreign choice-of-law and out-of-state litigation provisions in covered clinical health-care services agreements.", "verbatimQuote": "A provision in an agreement for clinical health care services to be rendered in this state is void, unenforceable and against public policy if the provision: (1) makes the agreement subject to the laws of another state; or (2) requires any litigation arising out of the agreement to be conducted in another state.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-healthcare-choice-law-venue" }, { "id": "healthcare-owner-exemption", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "NMSA 1978, § 24A-4-5", "citation": "NMSA 1978, § 24A-4-5(A).", "url": "https://nmonesource.com/nmos/nmsa/en/18973/1/document.do", "proposition": "Section 24A-4-5 exempts agreements between health-care practitioners who are shareholders, owners, partners, or directors of a health-care practice.", "verbatimQuote": "Chapter 24, Article 1I NMSA 1978 [Chapter 24A, Article 4 NMSA 1978] does not apply to agreements between health care practitioners who are shareholders, owners, partners or directors of a health care practice.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-healthcare-owner-exemption" } ] }, { "slug": "choice-of-law", "label": "Will New Mexico choice-of-law or venue clauses hold?", "heading": "Will a choice-of-law or venue clause avoid New Mexico non-compete law?", "answerText": "Not for covered clinical health-care services agreements. New Mexico voids provisions that make those agreements subject to another state's law or require litigation in another state.", "sources": [ { "id": "q8-healthcare-choice-law-venue", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "NMSA 1978, § 24A-4-2", "citation": "NMSA 1978, § 24A-4-2(B).", "url": "https://nmonesource.com/nmos/nmsa/en/18973/1/document.do", "proposition": "Section 24A-4-2 voids foreign choice-of-law and out-of-state litigation provisions in covered New Mexico clinical health-care services agreements.", "verbatimQuote": "A provision in an agreement for clinical health care services to be rendered in this state is void, unenforceable and against public policy if the provision: (1) makes the agreement subject to the laws of another state; or (2) requires any litigation arising out of the agreement to be conducted in another state.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-q8-healthcare-choice-law-venue" }, { "id": "q8-lovelace-public-policy", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Lovelace Clinic v. Murphy", "citation": "Lovelace Clinic v. Murphy, 76 N.M. 645, 417 P.2d 450 (1966).", "url": "https://www.courtlistener.com/opinion/1196089/lovelace-clinic-v-murphy/", "deepLink": "https://www.courtlistener.com/opinion/1196089/lovelace-clinic-v-murphy/#:~:text=The%20public%20has%20an%20interest,enforcing%20contractual%20rights%20and%20obligations.", "proposition": "Lovelace supports that New Mexico evaluates restrictive covenants against both contract-enforcement and competition public-policy interests.", "verbatimQuote": "The public has an interest in seeing that competition is not unreasonably limited or restricted, but it also has an interest in protecting the freedom of persons to contract, and in enforcing contractual rights and obligations.", "date": "1966-08-22", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-q8-lovelace-public-policy" } ] }, { "slug": "federal-ftc-overlay", "label": "Did the FTC rule change New Mexico law?", "heading": "Did the FTC's federal non-compete rule change New Mexico non-compete law?", "answerText": "No. A federal court set aside the FTC's 2024 nationwide Non-Compete Rule before it took effect, so New Mexico non-competes remain governed by New Mexico common law and the health-care practitioner statute.", "sources": [ { "id": "q9-ftc-rule-set-aside", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Ryan LLC v. Federal Trade Commission", "citation": "Ryan LLC v. Fed. Trade Comm'n, 746 F. Supp. 3d 369 (N.D. Tex. 2024).", "url": "https://www.courtlistener.com/opinion/10205745/ryan-llc-v-federal-trade-commission/", "deepLink": "https://www.courtlistener.com/opinion/10205745/ryan-llc-v-federal-trade-commission/#:~:text=The%20Non%2DCompete%20Rule%2C%2016%20C.F.R.,September%204%2C%202024%2C%20or%20thereafter.", "proposition": "Ryan supports the rule that the FTC Non-Compete Rule was set aside and did not take effect.", "verbatimQuote": "The Non-Compete Rule, 16 C.F.R. § 910.1–.6, is hereby SET ASIDE and shall not be enforced or otherwise take effect on September 4, 2024, or thereafter.", "date": "2024-08-20", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-q9-ftc-rule-set-aside" }, { "id": "q9-lovelace-state-law", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Lovelace Clinic v. Murphy", "citation": "Lovelace Clinic v. Murphy, 76 N.M. 645, 417 P.2d 450 (1966).", "url": "https://www.courtlistener.com/opinion/1196089/lovelace-clinic-v-murphy/", "deepLink": "https://www.courtlistener.com/opinion/1196089/lovelace-clinic-v-murphy/#:~:text=All%20of%20the%20physician%20and,or%20the%20associate%20are%20reasonable.", "proposition": "Lovelace supplies the New Mexico common-law reasonableness rule that remains the baseline for ordinary employment covenants.", "verbatimQuote": "All of the physician and surgeon cases either expressly hold or clearly indicate that the rights and duties created by the contract of employment or association are enforceable, if the restrictions thus imposed on the employee or the associate are reasonable.", "date": "1966-08-22", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-q9-lovelace-state-law" }, { "id": "q9-healthcare-state-law", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "NMSA 1978, § 24A-4-2", "citation": "NMSA 1978, § 24A-4-2(A).", "url": "https://nmonesource.com/nmos/nmsa/en/18973/1/document.do", "proposition": "Section 24A-4-2 supplies New Mexico's health-care practitioner non-compete ban.", "verbatimQuote": "A non-compete provision in an agreement, which provision restricts the right of a health care practitioner to provide clinical health care services in this state, shall be unenforceable upon the termination of: (1) the agreement; (2) a renewal or extension of the agreement; or (3) a health care practitioner's employment with a party seeking to enforce the agreement.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-q9-healthcare-state-law" } ] }, { "slug": "sale-of-business", "label": "Are sale-of-business non-competes different?", "heading": "Are sale-of-business non-competes treated differently in New Mexico?", "answerText": "Yes. New Mexico is more willing to enforce a reasonable covenant tied to the sale of a business than an ordinary employment covenant, because the buyer is paying for goodwill and protection from the seller's immediate competition.", "sources": [ { "id": "q10-bowen-sale-valid", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Bowen v. Carlsbad Insurance & Real Estate, Inc.", "citation": "Bowen v. Carlsbad Ins. & Real Estate, Inc., 104 N.M. 514, 724 P.2d 223 (1986).", "url": "https://www.courtlistener.com/opinion/1211410/bowen-v-carlsbad-insurance-real-estate-inc/", "deepLink": "https://www.courtlistener.com/opinion/1211410/bowen-v-carlsbad-insurance-real-estate-inc/#:~:text=It%20is%20well%2Dsettled%20that%20a,a%20sale%20of%20a%20business.", "proposition": "Bowen states the rule that sale-of-business restrictive covenants are valid when reasonable in time and space.", "verbatimQuote": "It is well-settled that a restrictive covenant is valid if it is within reasonable limits of time and space and ancillary to a sale of a business.", "date": "1986-08-27", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-q10-bowen-sale-valid" }, { "id": "q10-bowen-sale-deference", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Bowen v. Carlsbad Insurance & Real Estate, Inc.", "citation": "Bowen v. Carlsbad Ins. & Real Estate, Inc., 104 N.M. 514, 724 P.2d 223 (1986).", "url": "https://www.courtlistener.com/opinion/1211410/bowen-v-carlsbad-insurance-real-estate-inc/", "deepLink": "https://www.courtlistener.com/opinion/1211410/bowen-v-carlsbad-insurance-real-estate-inc/#:~:text=Courts%20are%20more%20reluctant%20to,than%20those%20in%20employment%20contracts.", "proposition": "Bowen supports greater reluctance to disturb sale-of-business covenants than employment covenants.", "verbatimQuote": "Courts are more reluctant to disturb restrictive covenants in buy-sell agreements than those in employment contracts.", "date": "1986-08-27", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-q10-bowen-sale-deference" }, { "id": "q10-bowen-enforced-written", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Bowen v. Carlsbad Insurance & Real Estate, Inc.", "citation": "Bowen v. Carlsbad Ins. & Real Estate, Inc., 104 N.M. 514, 724 P.2d 223 (1986).", "url": "https://www.courtlistener.com/opinion/1211410/bowen-v-carlsbad-insurance-real-estate-inc/", "deepLink": "https://www.courtlistener.com/opinion/1211410/bowen-v-carlsbad-insurance-real-estate-inc/#:~:text=The%20covenant%20should%20be%20enforced,into%20voluntarily%20and%20for%20consideration.", "proposition": "Bowen enforced the sale-of-business covenant as written because it was voluntary, supported by consideration, and reasonable in context.", "verbatimQuote": "The covenant should be enforced as written; it being entered into voluntarily and for consideration.", "date": "1986-08-27", "anchor": "https://openagreements.org/practice-guides/non-compete/us/new-mexico#src-q10-bowen-enforced-written" } ] } ] } }