What are the legal ramifications of breaking a non-compete clause?
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What are the legal ramifications of breaking a non-compete clause?
I am working with one company and have found a competitor that pays better. I would like to work for both but the current company has a non-compete clause in their contract and I am sure the other one will as well. If I was found, what would be the legal ramifications of these in fractures outside of termination from both companies?
Asked on May 30, 2012 under Employment Labor Law, Ohio
Answers:
S.L,. Member, California Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
You would be sued for breach of contract for violating the noncompetitive provision. If the company can prove lost profits by showing the loss of particular customers, the damages (monetary compensation) the company is seeking in its lawsuit for breach of contract could include that. If you interfere with an existing contract between the company and a customer or if you induce breach of contract between a customer and the company, you would be liable for those actions.
An alternative measure of damages might be that your contract with the noncompetitive provision might include liquidated damages. This would be a fixed amount of damages (monetary compensation) if damages for breach of the contract would be difficult to ascertain. If your employment contract with the noncompetitive provision has a liquidated damages provision, that is the amount the company would seek to recover for breach of contract.
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