Consequences of Violating a Non-Compete Agreement

By March 5, 2022 Uncategorized No Comments

As a general rule, it is difficult to prove that a non-compete obligation is enforceable. In most cases, the tribunal found that the non-compete obligation was unenforceable. For example, Lawrence v. Allen, Inc.c. Cambridge Human Res. Group, Inc. concluded that there was no legitimate business purpose and no disproportionate restrictions. In Northwest Podiatry Ctr., Ltd.c. Ochwat, the Court concluded that there was ambiguity and that the terms of the agreement were too broad. Typically, employers ask their employees to accept anti-competitive contracts, also known as restrictive agreements. Under Michigan law (MCL 445.774a), such agreements may be enforced if deemed appropriate.

If you are employed in Virginia and (1) have signed a non-compete agreement or (2) plan to sign an agreement so as not to compete, you should seek the advice of a qualified attorney. The law firm Erlich has extensive experience in assisting clients with employment contracts. As always, please contact one of our lawyers at (703) 791-9087 or email us for a consultation. Another common form is lump sum compensation. Lump sum damages are usually specified in the non-compete agreement in the event that an employee violates the non-compete obligation. If the non-compete obligation is valid and enforceable, you, as a former employee, may be required to pay pecuniary damages in the amount specified in the non-compete obligation. However, the courts have the power to decide if the amount is reasonable before you have to pay it. In most cases, the courts will not uphold the non-compete obligations because many of them are not legally enforceable. In a dispute involving a non-compete obligation, the court will usually try to determine whether the terms of the contract are appropriate. In general, when applying this tripartite test, courts consider whether an employer goes too far by using language so broad or ambiguous that it is difficult to determine its scope. Virginia courts are likely to validate an incomplete clause that uses clear and concise language to set restrictions limited to legitimate business necessities.

Finally, some information is considered so essential that courts often uphold agreements prohibiting its disclosure by former employees, including: consumer lists, accurate market shares, technology projects, and market expansion plans. 24. I am negotiating a non-compete obligation. Are there certain things I should ask? You can also try to prove that the terms of the contract are too broad. For example, if the non-compete obligation lasts an unreasonable amount of time or prevents you from working in too large a geographic area, the contract may not be enforceable. For example, if your employer operates in only one state, it would be inappropriate to prevent you from working for a competitor who does not operate in that state. It would also be inappropriate for a non-compete clause to prohibit you from working for a competitor after the trade secrets your employer wants to protect are no longer valid. It depends. First, look at the terms of the non-compete obligation itself. Is this a termination? Assuming that is the case — and he says that the non-competition clause still applies even if you are fired — the next question is: Is it legal? Again, the answer is: it depends. If the reason for your dismissal is misconduct on the part of the employer – discrimination, illegal activities by the employer or similar misconduct – most courts have ruled that a non-compete obligation is no longer enforceable. Indeed, the employer`s unlawful conduct was not part of the employee`s expectations when he accepted the non-compete obligation.

If the reason for your dismissal is employee misconduct – presence, poor performance or similar problems – then the fact that you have been fired will probably not be as important. Nevertheless, the courts may be less willing to enforce a non-compete obligation if it was the employer`s decision to terminate the relationship, not yours. Does the employer have a legitimate interest which it protects by the non-compete obligation? Your employer will let you know that you are bound by your non-compete obligation when you leave. The reality is that most employees don`t have the will or resources to fight them. Many workers believe that just because an employer forced them to sign the agreement or be fired does not mean that they are not bound by a non-compete obligation. This is simply not true. Maintaining employment is a valid consideration for a non-compete obligation in Florida. Florida laws assume that non-compete obligations apply.

That doesn`t mean you can`t get out of yours if you`re ready to fight. Legally, no, but it may give you an indication that the employer does not see the cost and risk of trying to enforce the agreement as it is worthwhile. It may also be that the employer has decided that the agreement is likely to be unenforceable anyway. This is unfortunately not a guarantee that the employer will not try to apply it in your case. .

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