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Allen M., Esq.
Allen M., Esq., Employment Lawyer
Category: Employment Law
Satisfied Customers: 19169
Experience:  Employment/Labor Law Litigation
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Please give me your interpretation of the following

Customer Question

Please give me your interpretation of the following paragraph, which is part of a representation agreement.
"4. NONCOMPETE COVENANT. For a period of One Year after the effective date of this agreement, Preferred Sales & Marketing (my company. I am the representative.) will not directly or indirectly engage in any business that competes with CDH Associates (the Principal of the agreement). This covenant shall apply to the geographical area outlined in Section 1 of this document."
My specific question is - Does the "Period of One Year after the effective date of this agreement" refer to the first year after the initial start date of this agreement? Once the one/first year is passed, this noncompete is not in effect?
Submitted: 1 year ago.
Category: Employment Law
Expert:  Allen M., Esq. replied 1 year ago.

Yes, that is how I read that agreement. Where we typically see this sort of language, it involves an employment agreement and the language is intended to be effective during the entire employment and for one year after the employment ends.

So, it would read like this: "Employee will not, either during employment with Employer or for a period of two years thereafter, directly or indirectly, for himself/herself or any third party, accept employment or engage in any business or activity which is directly or indirectly in competition with Employer."

For the agreement to make that year start at some other point than the date the agreement was entered into, it has to have that sort of language. I don't see that language there. What I see is an agreement with a non-compete the ends on the "effective date" which should be a dated defined in the agreement, or it is the date that both parties completed execution of the agreement.