Under what circumstances can a non-compete be voided?

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Under what circumstances can a non-compete be voided?

I was terminated from my employer for a questionable HR activity. Essentially I was given no consideration for the non-compete at the time I signed it. It was simply a condition of employment. I work for a competitor and my state is a small state with only so much business to go around at any given point. In order to do successful business I would need to compete against my old employer for old accounts to hit my quota. Since I was terminated does the non compete hold up? Without consideration would the court find any of it acceptable? How much would this cost?

Asked on February 13, 2012 under Employment Labor Law, Rhode Island

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Because you were terminated, the non-compete should be void. The consideration you were given for the non-compete--and it is valid consideration--was your continued employment (e.g. you could have been fired for not signing). In terminating you, the employer breached its implicit obligations under the agreement, to provide employment in exchange for a non-competition agreement. Also, as a matter of both equity and social policy, the courts do not allow someone to tie another's hands as to employment or supporting him/herself, then fire him or her so he or she cannot work. Thus, had you quit, the agreement would have been valid; but having been fired, you should be able to seek competing employment.

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