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A non-compete agreement will only be enforced against a former employee if the agreement meets all three prongs of the test laid out by the courts. Courts require that for a non-compete clause to be enforceable, an employer must show reasonableness, in that (1) it has a legitimate business interest sufficient to justify enforcement of the non-compete clause; (2) that the clause does not cause the former employee undue hardship; and (3) that enforcement of the clause will not be harmful to the public.
Under this three part test, courts consider several factors when determining whether a non-compete agreement is reasonable, including: (i) how long the restriction lasts and the geographic area that the restriction covers, (ii) whether the employee was the sole contact with customers, (iii) whether the employee possesses confidential information or trade secrets, (iv) whether the covenant operates to bar the employee's sole means of support, (v) whether the covenant seeks to stifle the inherent skill and experience of the employee, (vi) the likelihood that the employee can find other employment if the restriction is enforced and (vii) whether the benefit to the employer is disproportional to the detriment of the employee.
All the factors favor the agreement not being enforceable against you - its far to long, doesn't protect anything, seems like its there only to stop competition, and disproportionately harms employees. However, unless you are willing to take the matter to court to have the contract ruled invalid, you'll not truly know if thee employer can enforce its agreement. In short, only a court can definitively tell you whether the non-compete is enforceable, but these are the factors that would be considered by a court, and you'd have I believe a good chance to have the non-compete ruled unenforceable.
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In response to (ii), my sales team is indeed the "sole contact with customers." My sellers are the ONLY ones allowed to sell tickets to this comedy club.
In order to get a raise, he wants me to sign a 5-year contract agreeing not to represent any other comedy clubs.
Lastly, I am an INDEPENDENT CONTRACTOR and I do not technically work for him. He takes no deductions from my weekly checks.
Is it still your opinion that, if I choose to leave him before 5 years, this no-compete clause is unenforceable? The contract states that there is a $5,000 penalty for breaching the contract.
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