Do non compete agreements hold water?

About 15 years ago I started my own business and consulted with a lawyer regarding my noncompete agreement with my employer. I'd recommend you consult a lawyer, spend about $300 of his/her time, and make sure of your particular situation.

In general:

- Noncompete agreements need compensation for signing the agreement in order to be enforceable. If you were paid at least a $1 signing bonus then it is enforceable. If there was no signing bonus then it is likely unenforceable. About 20 years ago I was in a sales job and all salespeople were suddenly required to sign a noncompete in order to participate in a new compensation program. I demanded $50K for a signing bonus and all the other sales staff followed suit, and the next thing you know talk about a noncompete agreement evaporated.

- NCA's are based on case law (the outcome of court cases) and therefore can vary depending on where you live. Supreme court decisions affect everyone in the country, federal district courts affect regions, state court decisions apply only within your state, etc. This is a good reason why you would need to have a lawyer review your contract against case law that applies in your circumstance.

- NCA's cannot prevent you from earning an income in your field. They need to be reasonable in duration and location.

- If you have a binding NCA then you cannot actively contact the customer base covered by the NCA. HOWEVER, if you can document in writing that a customer contacted YOU and ASKED to do business with you, then the NCA can't prevent them from working with you. I've had several customers that called me to move their business to me after I departed my previous company. Often it is these kinds of customers that will make or break your start up.

Good luck with your new endeavor.

 

Very enforceable..... Extremely expensive if you get caught up in a NCA violation..... Whether they contact you or not you can't due business with them till NCA expires... Usually 1 year.... Good Luck...

 

Had a friend/broker I used haul for in the Seafood business.... Worked for Maust Trans...He started his own company with customers that pursued him to do it on his own n he got sued for somewhere in the neighborhood of 1.1 million..... Attorney fees-25% commission couple other costs I can't remember... It got ugly real quick.... Never experienced it myself-Just know that it's very easy to enforce in this business-Easy to trace back to customer.....

 

I had a three year noncompete. After several customers came to me after my departure from my previous employer he sought council to sue, but ended up declining to pursue that action after it became clear early in discovery that every customer sought me out.

At that time I was based in Washington State, with case law out of the 9th Circuit that support employee's right to work over NCA's.

 

Just because someone sues doesn't mean they're right. Look at cease & desist letters. Most are simply to scare a competitor from continuing, whether they legally can stop them or not.

 

This is absolutely right. The old lawyer's joke is that you can sue because the tide came in, but you won't necessarily win.

In my case it never went to trial once discovery revealed that my ex-employer didn't really have much of a case. Customers also have legal standing in these cases as well, at least in the 9th district ex-employees have a right to make a living and customers have a right to choose their preferred vendor.

Again, seeking legal council in your own jurisdiction to review the specifics of your case is critical.

 

Open up a starbucks... Let me know how that works out for ya... Maybe you could try a Mcdonalds while your at it....