If I recently quit my job in sales, what can I do about a non-compete agreement that I signed?
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If I recently quit my job in sales, what can I do about a non-compete agreement that I signed?
I signed a non-compete 7 years ago that says I can’t sell the same type of products with a competitor company within a 75 mile radius of my territory. In order to provide for my family that would require us to move to another area. How likely is it that my former company would enforce this agreement and, if so, how hard would it be to break the agreement?
Asked on May 12, 2013 under Employment Labor Law, North Carolina
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 10 years ago | Contributor
The fact is that courts do not favor these agreements. Nevertheless, they do recognize that non-compete agreements may be necessary to protect an employer's competitive positioning if it can establish that:
- The agreement was supported by "consideration"; in other words, that the employee received something of value in exchange for signing,
- The employer has a legitimate business interest in requiring the agreement, and
- The restrictions of the agreement are reasonable regarding geographical scope (place) and duration (time).
Consideration: If the agreement was signed before employment, the employer can establish that the consideration is the employment itself; if the agreement was signed after employment, states vary on whether it is necessary to establish consideration by increased pay, promotion or some other additional value to the employee.
Business Interest: An employer must demonstrate that it is attempting to protect a legitimate business interest. For example, that not having a non-compete will open it up to unfair competiton by the former employee.
Time and Scope: The terms of the restrictions must be reasonable as to the period of time in which the restraint is to last and the territory which the restraint covers.
Without more details it is hard to say as to whether factors #1 and $2 have been met. However, as to #3, while a 75 mile radious may be reasonable, a 7 year prohibition would more than likely not be upheld.
At this point, you need to consult directly with an employment attorney in your area.
Tricia Dwyer / Tricia Dwyer Esq & Associates PLLC
Answered 10 years ago | Contributor
Hello. Based on what you stated, I urge you to seek private attorney counsel in this matter. The enforcability of non-compete agreements is much in issue in law. It is stated that non-compete agreements tend to be viewed with disfavor by courts. The reasonableness of the terms and the entire agreement is critical, as is the matter of consideration (an exchange of something of value of the parties). As to prior actions of your former company, there are ways to research that matter.
Some attorneys, myself included, will confer for free, at no charge. Then, if legal work is performed, some attorneys, myself included, will provide a reduced fee for need. All the best
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