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John
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I live in Oklahoma. I have a non-compete agreement with a

Customer Question

I live in Oklahoma. I have a non-compete agreement with a company in Florida that I currently work for in Oklahoma. I would like to start my own company. The non-compete is void by Oklahoma law. However, the agreement states that it is subject to Florida law. If I started my own company and operated solely in Oklahoma, would I be subject to a lawsuit in Florida, under Florida law?
Submitted: 1 year ago.
Category: Legal
Expert:  John replied 1 year ago.
Hi, thanks for submitting your question today. Being that the company has a physical presence in Florida and that there is a voluntarily entered agreement to use Florida jurisdiction and law, the agreement is probably enforceable in Florida court. Likewise, the employer could sue you in a Florida federal court in the amount in question is in excess of $75,000.

You could argue in contravention to this that, even though there was a voluntary agreement for Florida law and jurisdiction, Oklahoma has (and Oklahoma law) has such a great interest in this because it does not enforce such agreements. I've researched and have not found a case exactly like this. There are cases out of California (which also does not enforce non-competes), wherein employees have been successful in getting California courts to deny enforcement of orders entered by other state court's favoring enforcement of the same.Application Group, Inc. v. Hunter Group, Inc. (1998) 61 Cal.App.4th 881.

If you are truly concerned about such a lawsuit what you may want to consider doing is seeking a declaratory action that the agreement is not enforceable in an Oklahoma state court, which is far more likely to rule in your favor than a Florida court. In short who wins in this matter may be determined by who sues first and where. So you may want to consider retaining local counsel to take the matter to a Oklahoma court to try to have the agreement ruled void.

This is a lot to digest, so if you have any further questions on the matter let me know. If you are otherwise satisfied with my response, please leave a positive rating as it is the only way I am able to get credit for my answers. Thank you, XXXXX XXXXX wish you all the best with this matter.
John, Attorney
Category: Legal
Satisfied Customers: 2864
Experience: Licensed and practicing attorney.
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Customer: replied 1 year ago.

Based on the reading I've done, I don't believe the agreement is valid in either Oklahoma or Florida. Allow me to provide a brief description.


 


The company I work for is called A.S.A.P Assembly Inc. I have also worked for National Assemblers Inc, also known as East Coast Assemblers Inc. Both have non compete agreements. ASAP prohibits me from working in the field for 18 months. National for 2 years.


 


The job is simply providing assembly services for Wal-Mart. I go to whatever store I am told to and build bicycles, grills, furniture, etc. I have never received any formalized training and the job does not require special skills. Each Wal-Mart store decides for themselves what contractor to use, if any, for their assembly. I have never been anything more than an employee and have never had access to any company information outside of what I get paid. I do not have access to company price list and they would not be able to claim that Wal-Mart stores are part of a secret customer list. I believe that they would be unable to prove that I have had access to any information that could damage them.


 


One area I am unsure of is my relationship with the managers at the local stores. Since I am the one that shows up to do the work, I have a working relationship with them. They know me personally and they have never met anyone from the Florida offices. This might be something they could use. I'm not sure.


 


Furthermore, I can provide work orders showing that I have not been paid properly by either company. East Coast Assemblers has a current suit against them for unpaid overtime. ASAP does not document hours and both companies have their employees work far more than 40 hours a week, though they claim not to. They also claim to be exempt from overtime because most work is paid by piece rate and not hourly. Both companies also require their employees to travel out of town and they do not pay for mileage or per diem. I have been told that Oklahoma law requires per diem, however I am not sure. They also don't allow you to count drive time toward your hours. This is ridiculous when they expect you to drive 2 hours, over 100 miles, to get to work. I don't know what the law is on that.


 


Could you please check for all cases involving National Assemblers Inc/ East Coast Assemblers Inc and A.S.A.P Assembly Inc. I know that many people have left both companies and started their own business around the country. The owner of ASAP was an employee of National before she got fired and started her own company. She was in violation of her non-compete but was not stopped.


 


I believe that the non-competes for both companies are a bluff that they know are unenforceable. Please search for any cases involving the two companies and let me know what the outcomes were.

Expert:  John replied 1 year ago.
For National Assemblers/East Coast Assemblers - the only case I found is the Fair Labor Standards Act Claim that you are already aware of. http://scholar.google.com/scholar_case?case=10802237477414930370&q=%22East+Coast+Assemblers%22&hl=en&as_sdt=1000001c0000007e07000038000000fc0e00000000000000000000012040102000300042408020400000000200000040004

I did not find any cases for A.S.A.P Assembly Inc.

I would tend to agree with you on your analysis of a non-compete to your matter. 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. Like you've stated the fact that you were the only person in contact with particular customer may hold some weight, but I doubt that is enough to render the non-compete enforceable. Likewise, it frankly doe not sound like this company would even have the financial resources to sue you. Non-compete lawsuits are very expensive.

You probably also have an overtime claim against ASAP. Having a piece rate system doesn't exempt an employer from overtime, travel that is a days work is to be considered compensable time and counted toward your hours for the workweek. There is no requirement that an employer reimburse for costs or gas mileage involved in travel, but most employers do it because it is a fair benefit and they can deduct 100% of the cost.

I think that answers everything...let me know if you have any further questions.
Customer: replied 1 year ago.

Thank you. As far as me being the only person that is in contact with the store, that is not the case. She talks to them about scheduling and I am only one of several assemblers that go to the stores. There is no store that I am the only one working at. I would assume that this gives enough less weight to that argument. I don't want to pursue an overtime claim against either company. I would rather just separate and be able to start my own business free of worrying about a lawsuit. The fact that neither company has been successful in enforcing it is comforting. I really appreciate the detailed answer.


 


I have one more question if you have the time. I feel like I've already gotten what I paid for so don't feel obligated to answer if you are too busy.


 


Is it possible to set up a corporation with the owners names hidden? Once they find out there is a new competitor in the area I'm sure they will try to find out who is behind it. I would like to make it as hard on them as possible.

Expert:  John replied 1 year ago.
There's no way really to hide the ownership of a corporation, these person(s) need to be listed on the filing documents and filed with the state. Further, most states now publish on their websites the names of the corporate officers. I suppose some people may have the ability to name a person(s) they trust as the sole corporate officer or managing member and not themselves; that would at least take that persons name out of the corporate records, but of course there is the risk in this.

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