How best to handle a breach of a non-compete agreement?

UPDATED: Nov 17, 2011

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

How best to handle a breach of a non-compete agreement?

We have 2 employees that came to us from another business. That business is now trying to sue us on the grounds that they had a non-compete. It turns out that our 2new(ish) employees did sign non-competes with this business (their former employer) for a 1 year period. We had no idea about the existing non-competes; we never asked during the hiring process as they are low level manufacturing type positions and not management. What legal ground does the former employer have to come after us as the new employer? Should we terminate their employment as a sort of proactive stance. What can the former possibly stand to benefit from this sort of lawsuit?

Asked on November 17, 2011 under Employment Labor Law, Florida


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

While you should get a lawyer to represent you any time someone threatens a lawsuit,

1)  If your businss is not a party to the contract--i.e. you did not sign the non-competition agreement--you cannot be sued. Contracts only bind those who sign them.

2) The two employees, however, could be sued if they violated their non-competes. Their former employer could seek monetary compensation and/or see an injunction (court order) barring them from working for you.

2a) If the employees are sued, you could then possibly join in the lawsuit to help  them defend it, as a party affected by the suit. However, again, whle the employees can be sued, you cannot be sued directly for their breach.

3) What does the other company gain? It can hurt a competitor; it can prevent any expertise, etc. learned at it from being used to help the competition and take market share; and/or it may simply be "personal"--management at the other company does not like these employees leaving for you, and intends to take any/all legal actions they can.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption