Can a non-compete be enforced for ideas that were discussed but not used?
Is it possible under PA law for a former employer to enforce a non-compete if you use ideas from that employer for a new business that was never followed through on (i.e. they internally decided to table it). Basically can they enforce it if you are engaging in a business they discussed getting into but never did.
2 answers | asked Jun 20, 2010 10:07 PM [EST] | applies to Pennsylvania
Answers (2)
Fascinating question. Some agreements which contain "noncompete" language also contain language about ideas of employees (and who owns them), so it would really require a lawyer to analyze the entire document.
In addition, as Chris mentions above, restrictive covenants like non-competes are not favored by the courts, and there are various circumstances and factual tests which they must pass to be upheld. That means a careful analysis of the job situation under which this agreement was entered into.
I suggest you meet with an employment lawyer to find out what your rights are. You may have to pay to sit down with an employment lawyer (we're not like personal injury lawyers who only take a fee 'if we recover,') however, you will know your rights when you're done, and that's usually worth the price of admission.
posted by Harold Goldner | Jun 22, 2010 12:58 PM [EST]
In addition, as Chris mentions above, restrictive covenants like non-competes are not favored by the courts, and there are various circumstances and factual tests which they must pass to be upheld. That means a careful analysis of the job situation under which this agreement was entered into.
I suggest you meet with an employment lawyer to find out what your rights are. You may have to pay to sit down with an employment lawyer (we're not like personal injury lawyers who only take a fee 'if we recover,') however, you will know your rights when you're done, and that's usually worth the price of admission.
posted by Harold Goldner | Jun 22, 2010 12:58 PM [EST]
Before I respond to your inquiry, I must state that we have not spoken, I have not reviewed the relevant documents and facts, and I do not represent you. Therefore, my discussion below is not a legal opinion, but is informational only. Finally, my discussion applies only to issues to which Pennsylvania or Federal law apply, unless otherwise specified.
That being said, noncompetition agreements have many requirements that must be met before they are enforceable; your agreement may not be enforceable for reasons that you don't yet know. However, I am unaware of any case law on the issue your raise. I suspect the matter depends on whether the 'idea' is merely a facet or add-on for their existing business, or if it is a separate business or industry (or even customer line). If the employer cannot be said to be doing business in your industry (or in your vertical within your industry), there is a very good argument that the employer has no legitimate business interest in preventing you from engaging in your business. Essentially, if your employer is not actively doing business in the area, can it really be said that you are 'competing?'
The bigger issue may be trade secrets, however. If the idea you are using can be considered a trade secret, then the employer may have the ability to ask a court to stop you from using the idea, OR from engaging in your business at all if you cannot do so without 'inevitably disclosing' the trade secret.
These are fact-based analyses; I would need to know much more before I could determine what risks you face.
If you would like to discuss this matter further, please feel free to contact me at the below address(es) or number.
/Christopher E. Ezold/
Nancy O'Mara Ezold, P.C.
One Belmont Avenue,
Suite 501
Bala Cynwyd, PA 19004
(610) 660-5585
Cezold@Ezoldlaw.com
www.ezoldlaw.com
posted by Christopher Ezold | Jun 21, 2010 06:00 AM [EST]
That being said, noncompetition agreements have many requirements that must be met before they are enforceable; your agreement may not be enforceable for reasons that you don't yet know. However, I am unaware of any case law on the issue your raise. I suspect the matter depends on whether the 'idea' is merely a facet or add-on for their existing business, or if it is a separate business or industry (or even customer line). If the employer cannot be said to be doing business in your industry (or in your vertical within your industry), there is a very good argument that the employer has no legitimate business interest in preventing you from engaging in your business. Essentially, if your employer is not actively doing business in the area, can it really be said that you are 'competing?'
The bigger issue may be trade secrets, however. If the idea you are using can be considered a trade secret, then the employer may have the ability to ask a court to stop you from using the idea, OR from engaging in your business at all if you cannot do so without 'inevitably disclosing' the trade secret.
These are fact-based analyses; I would need to know much more before I could determine what risks you face.
If you would like to discuss this matter further, please feel free to contact me at the below address(es) or number.
/Christopher E. Ezold/
Nancy O'Mara Ezold, P.C.
One Belmont Avenue,
Suite 501
Bala Cynwyd, PA 19004
(610) 660-5585
Cezold@Ezoldlaw.com
www.ezoldlaw.com
posted by Christopher Ezold | Jun 21, 2010 06:00 AM [EST]
Answer This Question
Sign In to Answer this Question
Related Questions with Answers