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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 90125
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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Good Morning, I sold my company to a larger firm in June of

Customer Question

Good Morning,
I sold my company to a larger firm in June of 2011. I remained with the company as the employing broker for the firm for 18 months. As part of the sales agreement I have a non-compete for three years, worth according to the sales agreement $10,000. The firm was a home-condo vacation rental business. I also owned a travel agency which only deals with hotels and commission based services. I was recently told that I was violating my non-compete by owning the travel agency (of which I have owned since 2007) which was not part of the sale of the other firm and does not perform any tasks similar to the sold firm that violate the non-compete, yet their attorney says it does because it is and was an entity "associated with the main firm". It was clearly stated at the time of sale that the travel agency was not part of the negotiations it is a different business doing different reservations and it was very difficult to obtain an IATA status.
My last day of my contract was March 31, 2013. In order to keep my employing broker status I had to transfer my license to another firm. I did not want to do that so I used a company name I opened several years ago to transfer the license to keep it Active with the division of real estate. I am not using the license, or the business name, do not have a website and am not performing any real estate transactions it was merely to keep my license status active in the case I was to go into sales which is not part of my non-compete. The attorney for the firm says this is also a violation of my non-compete as well. I also disclosed that I was moving the license to this firm to the General Manager of the company when I was preparing the paperwork and it was not mentioned then that it was an issue. At the end of the conversation with the VP of the company he informed me that this can all go away ( the 3 page letter from his attorney) if I agree to take the company back for my final payment for the sale - ( I have one more payment left on the purchase due January 1, 2014). I think they are trying to force me to take the deal or they are going to find a way to not have to pay with bogus claims that I am in breach of my non-compete. I apologize if this is confusing as I am confused..thank you so much for any help or advice you could give me -realizing you don't have these documents in hand and it is he-said she said..Tricia McIntyre
Submitted: 11 months ago.
Category: Business Law
Expert:  Law Educator, Esq. replied 11 months ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.

In order to be enforcible in court, a non-compete agreement in Colorado must be narrowly tailored to protect only the legitimate business interests of the employer. Thus, you are stating the travel business does not compete or do the same thing the business you sold does and as such it would not be in competition. Furthermore, if you are not doing business with your broker license and it is sitting there, you have not violated the non-compete as they have to prove you are actually engaging in business with that license.

Thus, your feeling sounds correct in that they seem to be trying to get out of paying you the final payment. If your travel business does not compete in the same industry as their business it would not be a violation of the non-compete or the scope of their non-compete is overly broad, which means under CO law it would not be reasonable. Also, if you are not using the broker license, merely holding it, they have to prove you are using it against them to have a successful claim in court.



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