Are Non-Competes Enforceable? | A Corporate Lawyer Explains

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There is a lot of nuance to the enforceability of non-compete agreements. To save you some time, they are generally enforceable.
There are two common contexts in which non-compete clauses show up. In the employment context, non-competes are difficult to impossible to enforce. Non-competes in the sale of the business are much easier to enforce.
That said, there are three restrictions to consider in your non-compete agreement that affect its enforceability. Those are:
1. Scope of Activity
2. Geographic
3. Time
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Have questions? Book a call, and talk to Brett today:
clarity.fm/brettcenkus
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You can reach Brett through:
clarity.fm/brettcenkus
/ brettcenkus
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www.cenkuslaw.com
braatenwoods.com
merger-resources.com
_______________________________________________
Brett A. Cenkus has 20+ years of experience in business law, finance, and entrepreneurship. Through Cenkus Law, PC, he provides advice and services for mergers & acquisitions (M&A), securities offerings, founders’ agreements, and other general business law issues.
Through Braaten Woods, LLC, Brett helps business owners in the lower middle market ($2MM - $25MM) position themselves for sale, find buyers, negotiate, and close M&A deals.
Brett also maintains merger-resources.com, a site packed with free articles, videos, checklists, deal diagrams, template contracts, and other tools to help pass M&A knowledge to others.
Brett regularly consults with entrepreneurs and invests his own capital as an angel investor.
From 2010-2013, Brett served as Chief Legal Counsel of a publicly-traded international oilfield services company. From 2001 to 2006, he and a partner founded and built Paragon Residential Mortgage. Bridge Investments acquired Paragon in 2006.
Brett holds a Juris Doctorate from Harvard Law School and a Bachelor of Arts degree in Economics from Messiah College in Grantham, Pennsylvania.
Brett lives in Austin with his wife, Cathryn, and two children. He enjoys reading, squash, classic movies, great food and wine, and the New England Patriots.
#corporatelaw #mergersandaquisitions #businesslaw #corporatelawyer

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20 июн 2024

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Комментарии : 93

@eppsislike 3 года назад

Having set up a business in Miami, whilst being from The Netherlands, I'm happy to be able to learn about this - as we have the same method there too.

@dugsbunnyog3544 3 года назад

Hey Brett, just started a new job managing the warehouse of a tech installation firm. My previous employer, a facilities maintenance firm that sometimes installs tech(in COMPLETELY different sectors/customer bases), has accused me of breaching a laughably short and non-specific clause that is vague in describing activity and doesn't even mention geography. My new role is literally managing a warehouse for shipping and repair.

@brianbeideman94 2 года назад

Brett, great video. What about a small business that has an employee sign a non-compete, and then leave and open up a similar online store selling the same brands that you sell in your brick and mortar? And then what if that same person starts doing pop-up stores right in the same neighborhood? Thoughts?

@melmel472 Год назад

I go to a top law school and this helped me understand the enforceability of non competes better than my $300 book and class. Thank you

@TardyKat 3 года назад

Came across your video recently as my sister is being asked to sign a non compete and doing some research. Her agreement didn't specify Geography/location/job scope limit. We're in NY, the company, an apparel manufacturer mainly buys licenses to reproduce children clothing designs (e.g . From Disney, Marvel etc). They can sell to any state and retailer. Sister's job is as the liaison for fabric testing between factory and test lab. The agreement limits her 1 year after employment where she cannot work for any other company that is commercially reasonably determined by them to be a direct competitor. Wouldn't that mean she cannot work for 1 year if she were to quit and find another job doing the same thing in the same industry? It's a small family owned business so negotiating a higher severance (if she was let go for any reason) is unlikely to happen. I asked her to negotiate for a shorter time restriction. Is the company asking for 1 year reasonable? What she does doesn't involve unique skills or special training to do. Any advice appreciated.

@alejandrovega6842 4 года назад

Thank you!I'm an SEO intern working for a pest control company. I read the non-compete and it strictly pertains to the pest control industry. However, they tried to convince me that I couldn't perform SEO outside of their business for a year after being let go or quitting. It seemed unethical as I am only making 15 an hour as a college student. Thank you for explaining.

@BrettCenkus 4 года назад

you're welcome. Applying a non-compete to a marketing intern seems like a special class of employer abuse! I'm not saying they couldn't enforce it and there could be something I'm not seeing (understanding about what you do and their business), although it sure sounds like over-reaching.

@Sortthingsout-79 2 года назад

Same here I am working at a logistics company doing their billing for $20 an hour and they are trying to make me sign a non compete/NDA. I was hired Nov 1st, and they just handed me this Dec 17th. it is saying I am liable forever. I am seeking legal advice before signing anything. thank you for the English version explaining this type of form

@mwwhited Год назад

They would have a hard time enforcing such a contract. Especially if they fired/laid off the employee versus the employee resignation. It would double down on difficulty if it was so broad you couldn’t work and where even in other businesses outside of their scope of business. In most states being so broad for the employer would nullify the entire contract.

@williamjohnson1668 Год назад

This law was passed in 2010 in Texas. Business owners believe that they have more powerful than they actually are, but a police officer has a little bit more power when they arrest that business owner for human rights violations and shut businesses down for corruption (Racketeering Influenced and Corrupt Organization Act), aka RICO. Patents and blue prints are only valid for so many years, then they are released to the public, which is how generic brands. Then there are monopolies - we can not have them. Make sense?

@MyNguyen-rl4sh 7 месяцев назад

Hey Brett! So glad I came across your video. Thank you for the context on noncompete. I would like to know in the state of Maryland, how will a noncompete duration work if on the agreement, it does not specify the expiration date?

@BrettCenkus 7 месяцев назад

My, This is a very niche question for a Maryland employment lawyer. In other words, I'm unsure and not the perfect person to ask. That said, I found this 50-state survey online - beckreedriden.com/wp-content/uploads/2012/09/Noncompetes-50-State-Survey-Chart-20130814.pdf. According to it, MD is a blue pencil state. There are three approaches a state can take re: overly broad noncompetes (which I think applies to your facts, given there is no expiration date whatsoever) - (1) red pencil, which means don't touch the wording and if it's overly broad it will likely be unenforceable, (2) reformation rule, which allows a court to go so far as to rewrite noncompete provisions to make them enforceable, and (3) blue pencil, which allows a court to strike unenforceable aspects of a noncompete but not rewrite them, and I think (although I'm not sure) that blue pencil courts don't add terms. I also found this case - www2.mdd.uscourts.gov/Opinions/Opinions/ELH-22-686%20Memorandum%20Opinion.pdf, which cites a Maryland case titled Cytimmune Sci., Inc. v. Paciotti, which cites another case, Deutsche Post Glob. Mail, Ltd., for the proposition that Maryland courts may not "rearrange or supplement the language of the restrictive covenant." So, I think (again, take this with a grain or silo of salt) an employer looking to enforce a noncompete under these facts would face challenges.

@Appmtbpr 4 года назад

Thanks for the video, very helpful.

@BrettCenkus 4 года назад

you're welcome, Eduardo

@RyanH0809 2 года назад

Very helpful information! Does a NCA/NCC prevent an employee of business from working part time on the side in the same or similar field of work? Understanding that said employee is not directly competing with his/her employer or soliciting that company's clientele? I've seen employers convince their incoming workers that operate as a "non-compete" company and that they prohibit "moonlighting" within that industry. To me, this seems to be over-reaching and not enforceable. Am I wrong?

@anino1984 3 года назад

Hi Brett, I hope you're Good and that you're still reading these. I am a locksmith in Upstate NY. I have been with the company for about 5 years now, they are pretty much a Monopoly in this area with them being the only locksmith in a 50 mile area. Well, the business has new owners, and when I spoke with the old owner and told him that I wanted to leave and start my own company he told me to be careful because I signed a non-compete which cover a time period of 1 year and a radius of 50 miles. I feel like i was kind of tricked because I am just now finding out about the agreement, and my question to you is, if it is a new ownership, and they never went over this non-compete I signed with the old owner, can they enforce this? Sorry for the long rant. Thanks

@imnotdillon 3 года назад

I work in the medical Marijuana industry in Florida & signed a non compete agreement for a part time job that I held for 2.5 months, then got a job offer from another cannabis dispensary. Now my previous employer is threatening to sue me if I proceed with the new job offer. I have no access to proprietary information from my previous employer. Is it just a bluff?

@abrahamherreramaciel3075 3 года назад

Thanks for the video, the company I worked for the last 4 years was sold last December and the new company offered to all the employees a position to continue with them (Tennessee, warehousing services and forward logistics), problem is....the enrollment process included to accept a "non compete agreement "....after few months working on this new company I have decided not to continue with this company...I do have an offer for a similar role with a company located in Kentucky (providing repair services and reverse logistics) the agreement does not establish any geographic limits and its essentially covering everything i have worked in the past (warehousing, testing, repair, logistics)...would this be enforceable?? Appreciate some orientation. Thank you

@fnuhashmatullah922 3 года назад

Hello Sir, Thanks for your helpful Video ... Can we have two full time jobs at same time(9 to 5) in Texas if we work from home ? is it legal ? Is it enforceable in Texas court ?

@markushuang9965 Год назад

Hello Brett, I work for a large logistics company and Im a manager for their final miles service, which warehouse and fleet management are my specialty. I’m currently based in Ohio and the company is based in Arkansas. If I take a job back home (TN) let’s say as the manager of a retail warehousing facility, will that be enforced by non-compete? Assuming that particular retail company does not compete with my current employer in any shape or form and does not have any business relationships with my current employer.

@kimeunjun 5 лет назад

love your videos! i think it might also help to throw in a short sentence about the 14th amendment as some context for why non-competes are more difficult to enforce for employment contracts as opposed to other ones, just to help viewers understand the logic

@BrettCenkus 5 лет назад

Thank you for the feedback! Do you mean the 13th amendment? I've not thought about non-competes in the context of constitutional amendments ever, although the 13th seems more applicable. Am I missing something?

@kimeunjun 5 лет назад

I only heard about it for the first time recently too because it's a relatively new theory (nothing set as law by SCOTUS yet), but the basic idea is that citizens should have the right to practice a lawful profession and not be stripped of that right without due process (e.g. not being denied the right to "compete" in a new employment). Courts that ruled on this issue have applied the rational basis test, probably because they aren't sure how SCOTUS might rule on it in the future. I haven't read it in full yet, but David E. Bernstein, The Due Process Right To Pursue a Lawful Occupation: A Brighter Future Ahead?, 126 Yale L.J. 287 (2016) seems like a good summary of the ideas floating around now!

@BrettCenkus 5 лет назад

that is interesting. At first glance, the argument seems more focused on the regulatory barriers to practicing a profession rather than contractual non-compete agreements, which makes sense (since I'm still having trouble connecting the 14th amendment to contractual non-competes), although I will dive deeper -- something to learn here!

@kimeunjun 5 лет назад

Totally agree, since the constitution isn't intended to regulate private entities. I think the rational basis test used a pretty similar form of the 3-step analysis you used for non-competes, though, which is where I mainly saw the correlation. Thank you for your responses!

@michaellaughlin9179 4 года назад

Great video, thanks for the information. I am hoping you can answer maybe an odd question. I am looking to act as a sub contractor for government DOD IT contracts. Non competes are notorious between prime contractors and sub contractors. What court becomes the governing authority if a dispute arises? the state where the prime contractor or subcontractor is located?

@BrettCenkus 4 года назад

Hi, Michael. The contract(s) under which you work will likely have a governing law clause, which establishes the state law that the parties agree to use to govern the contract. With employment contracts, wherever I've seen this issue play out, regardless of the choice of governing law in the employment contract, states generally require the application of the law where the employee resides/works and don't allow the parties to override that in this context (they consider issues of non-competition to be so important to a state whose employees are affected (not able to work) that they won't allow "forum shopping"). I don't know that to be universally true and there are always exceptions even in the states where I've seen this issue occur, although that's a general position you'll see out there. Similarly, it is possible that courts would do the same with an independent contractor agreement, although I don't think so. I think you'd be free to choose between the state where you are and the state where the prime contract is located.

@CRAZYCHRIS27596 Год назад

Hey Brett, I have a noncompete for three years once I leave my job. But all I do is services so if I just do services for a new company just on the new company’s accounts could I be causing trouble?

@sublimetrance 2 года назад

Has anyone ever considered that wide-spread use of non-compete clauses on former employees working for a competing company actually exacerbates labor shortages across the country? Especially when dealing with high skilled jobs. For example, if a hypothetical business sector is dominated by just two companies, company A and company B, and both force all employees to sign non-competes. If an employee from A quits, they cannot go work at company B. Similarly an employee at B quits, they cannot work for A. This essentially removed 2 employees from the labor pool available to these 2 companies. The problem both companies face is that If this goes on long enough, both companies will find themselves with a drastically reduced labor pool of skilled employees. I have seen NO ONE ask this question. And to me, it seems like non-competes will be a major contributor to labor shortages over a long period of time.

@SaraSmilesandCreates 3 года назад

In Texas does it make a difference if you were an employee or independent contractor? Dance instructor here and I signed a non compete for a big studio. They have satellites in small towns so they have a 100 mile radius, 75k buyout, 3 years. It was a hostile work environment and I had to remove myself (20 years experience, never dealt with a studio like that!). Would I be able to start my own classes on the side. I had no billing info. No Insider access. Just a class roster, 30 kiddos I found and brought in myself.

@SaraSmilesandCreates 3 года назад

Of course that was the only info I ever saw. I don’t personally have a roster anymore! I was an IC.

@laughingvampire7555 Год назад

the irony business owners: evil government don't regulate us you only disturb the signals of the free market. also business owners: sign me a non-compete LOL in a free market there should be no non-competes.

@josephmorneau1856 Год назад

For Texas, what about a non-compete clause in an employment contract that does not have a buyout option for the non-compete?

@Jakethegoodman 6 месяцев назад

I was forced to sign a non solicitation clause in order to receive a scheduled commission payment 2 months after I had begun employment as a cable internet salesman. The scope follows the geographic and NDA guidelines applicable to the Ancillary Clause of the Texas law. But does the fact that I received payment prior to the agreement and the fact I was forced to sign it to receive compensation in any way nullify the agreement?

@mr.ssj3847 2 года назад

Are non competes enforceable for registered nurses in medspa? Dermatology practices which includes aesthetic procedures? For nyc? Is a registered nurse who is able to do botox and fillers before employment considered a highly skilled worker in which case i believe it makes non competes more enforeable? The reason i ask is because botox and filler can only be performed with doctors orders, so technically does an rn working for another business/physician qualify as directly competing because only the physician can sign up clients.

@JonathanWayneAndress 4 года назад

I am employed by a car dealership in the state of Florida to make commercials for them. I also have my own production company where I make videos for all kinds of industries. I signed a non-compeat over a year ago and accepted a pay increase of about 25%. I was perfectly happy with the arrangement. But now they have taken away 20% of my income because the dealership had a bad year. Not because of my performance. Do you think this is an enforceable non-compeat any more?

@BrettCenkus 4 года назад

I couldn't say based on what you've told me and I'm not super familiar with Florida's non-compete laws (the Florida statute). I can say that I'd be surprised if the change in your compensation was the key to invaliding the non-compete, i.e., if it even matters much in the analysis. I don't know why it would, given that non-competes often extend beyond the time parties work together at all (i.e., why would them paying you less change the ability to enforce the non-compete if, I'm making an assumption here, the non-compete allows them to enforce it for some time after they're paying you nothing at all). If you could tie the consideration for the non-compete clearly to the raise, which it seems like maybe you can, then it would matter some in Texas, although I still think the company would have a lot of ability to argue around that limiting interpretation.

@mesiken487 3 года назад

State of Florida . So autobody collision field , I’m just a body tech . In order to get hired at this shop I have to sign a non compete that states I can’t work for another repair shop 30 miles radius for 2 years if I was to quit or get terminated. Can this really be enforceable if I don’t end up liking the job ? I’m just an ordinary worker who doesn’t speak to customers and have their contact info or anything I really need the job to support my family as well

@BrettCenkus 3 года назад

I am not sure, Victor. I don't know the Florida non-compete laws well. In some states, that could be enforceable. And, practically, speaking even if you have a great argument that it is not enforceable in Florida for some reason, if you sign it and they try to enforce it anyway, it can be expensive to defend against their lawsuit (even if you ultimately win), especially if the non-compete does not violate a clear provision of a statute.

@joed9741 2 года назад

Good Evening Brett I live in Florida and signed a no-compete. Now I don't like the company culture and want to leave and I have only been there two weeks can they come after me if I quite

@TheKagirod 4 года назад

Hi Brett, I have a question about a noncompete contract I was recently informed involved my department which is an ultrasound lab under a private practice. We recently had 2 surgeons leave to go work at a local hospital and we were told due to a contract with the surgeons whose practice is now owned by the hospital that we cannot go and work at the hospital until 12 months after their departure or risk being sued individually. How can I face legal reparations for a contract I never signed nor have laid eyes on? Or is this just a scare tactic to retain staff? I have asked for a copy of the part of the contract that involves our department and was denied. Thanks!!

@BrettCenkus 4 года назад

Claire, I'm making a lot of assumptions here, although I think it is possible that the surgeons are subject to a no-hire clause that prevents them from hiring any employees from your current company for 12 months. If you're aware of that agreement (even if you haven't seen it, if you have reason to know about it), there may be a claim under your state's laws for something called tortious interference with contract, which is basically a claim that you know about a contract between parties and take action that has the effect of disrupting the contract. What's unclear to me is how the contract between the surgeons and your company could extend to the hospital that owns the surgeons' practice, although I suppose the hospital could have inherited their obligations in whatever deal the surgeons did with the hospital. If this is what's going on, I wouldn't think the hospital would entertain hiring you anyway. BTW, states are getting aggressive in limiting non-competes. California has always been very tough on them (it's almost impossible to enforce a non-compete against an employee in CA) and other states (e.g., Massachusetts) have recently introduced restrictive laws to curb the abuse from companies using non-competes to shut down competition generally vs. their intended use to protect companies from a loss of goodwill following an investment in an employee (i.e., helping to train them, give them special access to customers and secrets, etc.). Some companies really abuse non-competes by applying them to every employee regardless of context, which irks me.

@TheKagirod 4 года назад

Thank you so much for your thorough response Brett! I appreciate your willingness to share knowledge!

@BrettCenkus 4 года назад

@@TheKagirod You're welcome, Claire

@yourhighest24 2 года назад

This is really helpful, thank you. I do have a question...I am currently an at will employee and work remote. I applied to a 2nd remote job that operate at the same time 9-5 as one income seems to be hard in CA. The 2nd job offered me a remote position but in the offer letter it stated "while you are employed by this company you agree you will not engage in any other employment, consulting, or other business activity without the written consent of the company." I am hoping to work remote both jobs but really confused of this outlined language as I also do eCommerce and other online business and not sure if I am breaking the law or agreement? I am also a bit confused since I understand that at will employee means that I technically am not signing a contract since at will is not a contract. Would I be in trouble for trying to make a living? Thank you!

@sublimetrance 2 года назад

Wow... That is not even non-compete language! That language goes FAR beyond non-compete. That is insane language! I have similar questions as I am currently looking for employment in the software industry. For example. I also make ad revenue from a couple of websites I created as well as from another RU-vid channel. I do it in my spare time. It is passive income from prior work. Would I be in violation of such a contract like you describe? I am guessing I would be as making side money, whatever the source, is definitely a 'business activity'. It is getting to the point that I think everyone just needs to start their own business to avoid these sort of dictatorial employment contracts. On a side not, you need to get out of California. The cost of living and tax burden is just too high. My life got A LOT easier after I moved to the Midwest.

@pureluck8767 2 года назад

We are in a free country you can do whatever you want you don’t need to listen to that bullshit paper do what you wanna do it’s a free country

@alexanderlong7559 2 года назад

I recently left a company that sub contracted me out to start my own business. I live in a different state than the company. I have had former client of the company I used to work for contact me about doing work. I did not solicit them, they came to me, is that ok?

@mistermister1541 3 года назад

Curious - in the eyes of the IRS, how much does a non-compete and thereafter a cease-and-desist, lend to the argument that an independent contractor is actually treated as an employee?

@BrettCenkus 3 года назад

That is a great question, and I do not have an equally great answer. It is one of the factors that the IRS and state employment commissions will consider, although the IRS has 40+ other factors they consider, and courts are always quick to remind us that the factors are not subject to any simple test or calculation - they are weighed differently in every context. So, technically, it is just one more factor weighing in favor of classifying a worker as an employee, rather than an independent contractor. Personally, though, I think it carries more weight than a lot of the other factors, not because of the non-compete agreement per se, but because it speaks to a degree of control over the worker that is consistent with a formal employment relationship. Sorry my answer is not super concrete, it's a challenging issue (but a great question!)

@sansuggs 3 года назад

Hi.. I'm a massage therapist, and we were made to sign one. We are not employees, but independent contractors.. we receive a 1099 & not a W2. My question is can she really enforce it or is it a scare tactic? I'm happy working there, but I really didn't like signing it.

@BrettCenkus 3 года назад

Like most legal questions, the answer depends. :> I'm not aware of any states where non-competes are void if signed by independent contractors (ICs). They may be unenforceable with ICs in California, as they are with employees (with limited exceptions), although I am not sure offhand, and that would not be because non-competes are void with ICs per se, but rather because non-competes are tough to enforce in California generally (employee or IC). They're also especially tough to enforce in Massachusetts and Oregon. I'm sure there are other states that are equally challenging (this question is a state by state issue). Beyond that initial question regarding the significance of you being an IC, most states require that a non-compete be limited by geography, time, and scope of activity. And non-competes are generally permitted (in states and contexts that permit them) to the extent they protect legitimate business interests, not just to chill competition. The intent is to protect trade secrets and things like that, although many employers misuse them. A non-compete that says you can't work anywhere as a massage therapist, regardless of time and geographic restrictions, would be unenforceable under a lot of state laws. Again, this is a state by state thing and often a nuanced, complex analysis. Legal analysis aside, it seems ridiculous that you were asked to sign one in this context.

@tracyrobards2568 3 года назад

I am an ultrasound technologist that was working for an imaging center. I gave them my notice so I could work for a travel company company out of state. I would have been taking 13 week contract at hospitals across the country. COVID-19 happened and I tried for 2 1/2 months to get a contract traveling but there were no jobs due to the virus. I had to see if there was a job available where I currently live and there was only one. I applied and got the job. My old employer in the same area sent me a cease and desist saying that I broke they are non-compete agreement. It wasn’t my intention for this to happen. What do you think about this? This field of diagnostic imaging that I work in has no “trade secrets”. Everything that’s done in diagnostic imaging is held at a national standard with certain protocols.

@BrettCenkus 3 года назад

Tracy, your situation is unfortunate, and I'm sorry to hear you received a cease & desist letter. I don't like the way many companies use non-competes-to stifle competition, not to protect legitimate interests (e.g., trade secrets and truly special training). That said, I don't know if yours is enforceable or not. That would depend primarily on what you signed and the state you're in (i.e., its laws on non-competes). Your intention won't matter to the analysis of enforceability. It makes your situation tougher to accept (for you mainly, although even for me, just hearing about it), although your intent is not part of the legal analysis. Your intent could positively affect how a judge or jury ultimately decides a case. However, you wouldn't know if that's driving some of how they reason to a final determination, so it is not something that you can leverage or confidently rely upon upfront when making decisions (whether or not to fight back). Unfortunately, I cannot give you anything more helpful than that without knowing more (and wouldn't provide specific advice in this forum, outside of an attorney-client relationship).

@tracyrobards2568 3 года назад

Brett Cenkus Thank you for getting back with me. I’ve just been wanting to get some feedback from other people. I’m fortunate that my aunt is a lawyer She’s taking care of it for me. Hopefully all goes well.

@BrettCenkus 3 года назад

@@tracyrobards2568 Yes, I also hope it goes well for you!

@tracyrobards2568 3 года назад

Brett Cenkus it’s done. My aunt took care of it over the phone with their lawyer. She sent them a letter on agreement terms. I get to stay at my job and all is good!

@BrettCenkus 3 года назад

@@tracyrobards2568 That's awesome news! I am glad it worked out for you. Well done, aunt!!

@minecraft5501 4 года назад

Thanks for the info! I have a situation i need help with. I work for a very small window cleaning business and my boss made me sign a Non-Compete agreement. Im wanting to leave and go work gor my dad as he is starting his own windoe cleaning business. Would that be illegal or not? Im only 18 so i just don't want any legal trouble

@BrettCenkus 4 года назад

It depends on what the non-compete says, although I suspect that working in your Dad's business will be a violation since you'll be doing the same thing your are currently. Non-competes are generally limited in three ways - scope (what you can't do), time, and geography. If the one you signed is limited by geography and your Dad's business is out of that area, you'd be okay. Whether the non-compete is enforceable depends on the state (the governing law) and, in most states, other factors. However, even if the non-compete would not hold up in your state, your boss may try to enforce it and defending against that would cost money, which, unfortunately, makes it tough to justify the risk of violating it even if it is bs (not saying it is, IDK). If you want to fight the non-compete (challenge it), I'd recommend engaging an attorney in your state.

@minecraft5501 4 года назад

@One Contrarian I went ahead and decided to wait. Not brave enough haha. Although one of my friends started his own business and put me as a manager for it. I've taught him a lot about the business. Making pretty good money. Hope the best for your bro!

@ocramas 3 года назад

How do you see the situation when one of the clients of the company that I work for wants to hire me? not for competing reasons, they just opened a position and asked me if I wanted, just based on my background and skills ..., is that some sort of breach or something?

@BrettCenkus 3 года назад

This situation isn't any different than any other when it comes to analyzing whether or not you're violating a non-compete agreement. in other words, you'd be just as bound by the terms of your non-compete in this context as any other. There may be two primary differences - 1) you may have more leverage to negotiate around your non-compete if the client went to your company and talked to them about the situation (essentially the client would be threatening to move their business if your company doesn't let you go work for them); and 2) if you go work for a client of your company, would you really be competing with your company? Most clients aren't in competition with the companies who sell them products and services. They're operating in different markets or, at least, different points in the supply chain. So, it may be that you're not actually competing by going to work for your client. This issue would turn on the exact wording of the restricted business (what you cannot do). It's also possible that the client has a non-solicit provision in their agreement with your company. That's a restriction on them trying to hire employees of your company. They may not, although it's another thing to consider.

@ocramas 3 года назад

@@BrettCenkus thank you so much for the detailed explanation

@BrettCenkus 3 года назад

@@ocramas You're welcome

@rayhurtado4568 3 года назад

Are they enforceable if you never actually start the job? For example you sign the con compete and job offer but never actually show up for the job and rescind before it starts?

@BrettCenkus 3 года назад

No, I don't see a noncompete could be enforced in that situation (or what employer in their right mind would try to enforce one under those circumstances), unless they gave a whole lot of pre-employment training and information to someone. Even so, seems like a stretch.

@OmarOsman98 Год назад

There was no consideration. Not a contract

@TheApocalypticsaint 2 года назад

I am about to be sued by my former employer for breach of a non compete in Kansas. His company is a mess, we were 1099 and treated like W2 employees, his non compete agreements were not standard; all of ours were different, and I left because he wasn't paying me correctly and refused to work and take calls for him until that was resolved. As far as I have understood it I'm in the clear but I would really like some eyes on this simply to get some peace of mind and have a plan.

@MammasLife860 2 года назад

@zechariah how did it go? I’m in the same place.

@TheApocalypticsaint 2 года назад

@@MammasLife860 guessing his lawyers talked him out of it

@MammasLife860 2 года назад

@@TheApocalypticsaint got it, I left that vendor he doesn’t pay well to my employer and indirectly to me, I left him looked for other vendor and joined back the client , but had a noncompete agreement and he filed a case now , I hired a lawyer but let’s see how it goes, he’s making 50% and paying me 50% which I felt is very bad on his part

@joshuagharis9017 11 месяцев назад

Feel like they discourage worker coops

@williamjohnson1668 Год назад

Texas is classified as "Right to Work", which abolished unions and security agreements. Meaning that it is a free market place

@sextonblake4258 Год назад

A non compete is an entirely fair restriction in exchange for information, training and a decent wage. If you don't want the rules don't take the coin. If an employer then breaches the contract by failing to pay then the non compete is out the window. Also if the job is declared redundant then the need for the non compete is also redundant. There is an arguable exemption if the NC is needed to protect a residual workforce. The US will abolish non compete agreements at their peril. Because all that will happen is that foreign predators will cherry pick a few knowledgeable employees and transfer the information overseas, thereby harming the American workforce. That's how large numbers of decent paid jobs got shipped to China.

@hteadx Год назад

LIES!!!!! FAIR MY @SS!!!! They have trade secrets laws and non solicitation to protect companies! And if foreign companies is going to steal employees they don’t CARE about Noncompetes! Noncompetes are for corporate socialist! They don’t want a freedom market, they want the status quo.

@NeuroScientician Год назад

What if hospital forces a nurse to sign it, is it enforcible? If nurse, get a job in another hospital.

@prithvitanna2011 Год назад

so basically as long as im not taking clients from them im good

@MarkMcDaniel Год назад

Non-compete clauses are asinine. As though a company has the right to say what you can or can't do after leaving their employment is pure evil.

@thefirefenix7194 2 года назад

@JL-fq3jc 3 года назад

Thinking about quitting my job at a plumbing business in Texas and starting my own business in the same area. I signed a non compete stating that I could not start a company within one year or in same geographical area of company I work for. I signed this about 8 years ago and have been with company over 20 years. Is this enforceable? If so is it difficult to enforce and is it costly?

@BrettCenkus 3 года назад

From the few facts you laid out, it sounds enforceable. To enforce an NDA if a former employee fights back, and if the case goes all the way to trial, is not cheap. IDK, figure a minimum $50K per side and likely 2x that as an average small business non-compete lawsuit. However, for something like $5,000, an employer can pursue an injunction to get a court to temporarily require the former employee to stop working, and that can be enough to get the former employee to back down. Actually, in some cases, a nastygram (threatening letter to the former employee and their new employer) gets the job done. And, considering that most employers have more resources (e.g., money) than former employees, this is a tough battle for most individuals (former employers) to fight, even if they have the better side of the argument.

@JL-fq3jc 3 года назад

Brett Cenkus thanks for the response, I thought Texas was a right to work state... I could understand if I left and took employees with me or directly solicited my employers clients or customers but how can they stop me from working that just doesn’t seem right to me and I would think any judge would tell them that it’s not enforceable

@realtopia2479 3 года назад

@@JL-fq3jcBeing a right to work state has to do with unions (i.e., workers not being required to become union members to work). That issue has no bearing on the enforceability of a non-compete. If your non-compete says that you will not start a company in the same area, but it allows you to work for another company, that would not be restricting your ability to work entirely. It's possible that your non-compete would fail for a lack of proper consideration. The fact that you signed it after working for the company for 12 years suggests that could be the case. Here's an article that explains this issue well - northtexaslegalnews.com/2019/06/17/what-is-proper-consideration-for-texas-non-compete-agreements/. Beating down a non-compete for lack of consideration can be challenging. It's a nuanced legal analysis (based on certain facts), i.e., not the type of thing that a judge would see as obviously flawed. That is all to say that it could be expensive to fight if your employer wants to enforce the non-compete. Also, this is a situation where you would benefit from the advice of a specialist. I suggest you call a couple of employment (labor) lawyers (litigators) and see if they'll give you initial consultations. If they will, show them your non-compete agreement, give them all the facts, and see what they say.

@JL-fq3jc 3 года назад

Realtopia thank you I will check the link, also there was nothing offered when I signed the non compete contract..other than staying employed. I don’t know if my employer would even try to enforce since they are good people and I’ve been there for so long...(esp since I wouldn’t be trying to take they’re customers)..but one never knows.

@Jackiie01 3 года назад

Do I have to tell my boss where I’m going if it’s not violating the noncompete?

@Crystal-jr7lp 3 года назад

@certifiedyaminspector-dadd6224 2 года назад

I thought contracts actually meant something until I opened up a contracting business & watched ppl wipe themselves with the paperwork. 😂 Everyone swears they're going to sue until they speak with a lawyer & hear the cost of litigation without the guarantee of victory. Paperwork is basically a deterrent

@BrettCenkus 2 года назад

I understand your frustration and lots of our clients would echo it, at least when it comes to getting paid. It can be a wake-up call when a customer doesn't pay that it is not easy to get them to pay. From my perspective, I think most parties honor their contracts until they can't. When we see people/companies that ignore contract terms, it is generally because they are desperate (sometimes we have no idea what's really going on, although other times there are clear indicators). Thank you for your comment!

@joshuagharis9017 11 месяцев назад

Non-competes are so sickening

@BrettCenkus 11 месяцев назад

Often abused for sure!