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Questions about Non Compete Agreement Laws

What is a non compete agreement?

A non compete agreement is where an employee enters into an agreement not to pursue a similar profession or trade as competition against the employer. The non compete agreement is also bound by the principle of consideration. This implies the non compete agreement may be in force after the termination of employment because the employee may work for a competitor, start his/her own business or take advantage of confidential or sensitive information from the former employer such as trade secrets, client lists, best practices, marketing strategies, and so on. Majority of the states in the U.S. except California, recognize and enforce non compete agreements. This type of agreement is common in the field of radio, television stations and with people who work for media companies.

I am under a non compete agreement which restricts me from working for the same client through another vendor. Since my employer is not paying salary on time, can I work for the same client through another vendor?

If salary is not be paid and the employer is guilty of defaulting on such payments, you can terminate your employment and be released from the non compete agreement as well. The employer does not have the right to default on salary as well as deny you from finding an alternate employment. If on the other hand the employer is delaying payments or you are unable to prove default of payment, the enforceability of the non compete is dependent on time and area. The court will consider the proprietary need of the employer to protect his/her business through the employee’s professional capability.

If this matter goes to court, non competes are usually expensive to enforce. Non compete agreements should be fair to both employer and employee, based on relevant public policy and narrow in its scope. Usually if the employee’s actions are extremely undesirable the court will uphold the non compete agreement. In this scenario, the chances of the employer spending money on a court case are slim and even if they do, the bias is usually towards the employee.

In what way is a non compete agreement effective?

A non compete agreement is governed by state and case laws. Due to case and state laws, non competes are time restricted as well as limited geographically. Each state may have different laws and interpretation of rules which concern non competes. Case laws also get altered when new or different cases are added or ruled upon. In order to assess the viability of your agreement, you would need to research on your particular state’s laws as well as recent developments in case decisions. This is a complicated task and is also dependent on the specific wording in your agreement. It would be useful for a local attorney to review your agreement and provide a professional viewpoint after a detailed review.

As an independent contractor I have been prohibited to contact clients and suppliers from my former company through a non compete agreement. Is this enforceable?

With a non compete agreement, the employer seeks to bind the employee from terminating the relationship to work for a competitor. The evaluation of enforceability of this agreement is dependent on the following factors:
  • Independent consideration- the employee is offered financial compensation or non monetary consideration such as training or promotion.
  • Geographic Limitation – the geographical limitation could be narrow or broad depending on the type of businesses, either local or international. The key is to check if the employer has justifiable business scope which merits protection.
  • Enforcement period – the non compete agreement is generally in force for two years or lesser after the employment relationship has ended. If it is longer than this period, it needs to be verified.

As a sales agent I have entered into a non compete agreement with my company. The company is into receivership thereby withholding the agent from conducting business. What are the legal consequences if I leave the company?

The sales representative is not obligated to honor the non compete agreement if the company is no longer in business. If the company is still operating at the time of receivership and you can make sales although not to your full capacity, the non compete agreement can be enforced against you. You will need to try and negotiate a release from the agreement and if that is unsuccessful, you can be sued for violation of the terms of the agreement making you liable to damages which could include attorney fees as well.

Non compete agreements are used as a common and useful tool to control the actions of the employee when it comes to safeguarding the interests and trade secrets of the company. In one way it maximizes the output of the employee towards the company goals but can also limit the scope of the employee’s professional career for a period of time. To know more about non compete agreements and have your questions answered, consulting Experts can help in providing the right and relevant information.

Ask a Lawyer

Tina
Tina, Lawyer
Category: General
Satisfied Customers: 8603
Experience:  JD, BBA Over 25 years legal and business experience.
4460311
Type Your Legal Question Here...
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Recent Non Compete Questions

  • Hello, Veronica Pham here. I am trying to reapply for a Sales

    Hello,
    Veronica Pham here. I am trying to reapply for a Sales RE License. Back in 2002 I was out of work, holding a condo mortgage and sending out resumes and going to job fairs and still could not land a six figure income job. Meanwhile I had bills, auto and mortgage to pay every month. It became a financial hardship and desperation to make money. On April 2002, after coming from a job fair in San Meteo, I stopped into the Palo Alto Shopping center and was looking to buy pantyhose stockings to were with my tailor suites since the ones I had kept tearing and run lines getting bigger down the pantyhose. I found some bras and pantyhose that I liked at the Palo Alto Neiman Marcus that I like to buy. I went to pay for them at the cash register. I was frustrated and upset when they rejected my Visa card payment and said they only take American Express or the NM credit card.
    With the already months of job rejections and bills piling up, this Pantyhose and bra purchase Snapped me. I walked away and was Rejected from this purchase as well as job rejections and Bills to pay.
    I am wrong to have put the unpaid pantyhose and bras in my bag and left the store without paying for them. I did want to pay for them with my Visa card and the extra Rejection of the Visa card only added to my Job rejections, mortgage to pay and bills piling up. I am wrong for that.
    The shoplifting came to a grand total of $1,800 since they were a high end department store, the items added up Big. In 2002, I did 3 months community service, returned all merchandise back to the store, paid all my restitution and got an early Expungement in 2002.
    In 2006 I passed the Sales RE License exam but went to Hearing in 2008 with DRE Judge in Sacramento. Judge Green did not let me have the Sales RE License. He said the crime was still too recent between 2002 to 2008.
    I am now married and have a 2 1/2 yr son since 2011 and we live in West Sacramento next to the Railey Baseball field. My husband works in SF and we plan to live in San Rafael this coming June 2015. I would like to go back to work as a Vacation Time Share Sales Rep for Shell Vacations near Pier 39. They need a sales RE license to work there which is why I would like to re apply for the CA Sales RE License.
    Only one week form 2015, it has been 13 years ago that I have this conviction Expunged and would like to know if DRE will accept me if I pass the Exam and try to re apply for the RE Sales License to work for Shell Vacations near Pier 39. ?
  • How is it that one would get to speak to a cheif judge? Also

    How is it that one would get to speak to a cheif judge? Also if I get to do that what can he or she do.
  • I am trying to help my 46 year old niece get on some form of

    I am trying to help my 46 year old niece get on some form of disability income as she has mental and physical issues that prevent her from working. We filed for social security disability and they said she had only 8 work credits and she needed 20. We live in Indiana, and my question is there some way to get around this or is there some other type of assistance she could apply for the would give her some income. i have been helping her for some time, but I retired and am no longer able to help her like I used to. Thank You
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