Can a non-compete clause be enforceable if my distributor's area has changed?

When first being hired by my company, I signed a non compete listing counties that the non compete was held to. If my employer no longer has the distribution rights to many of those counties and areas to sell the companies products, can I still be held to the non-compete? Basically if I'm no longer allowed to sell in certain areas due to another distributor taking over that area, can I still be held to my non compete?

2 answers  |  asked Aug 1, 2012 6:24 PM [EST]  |  applies to Pennsylvania

Answers (2)

Christopher Ezold
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, New Jersey or Federal law apply, unless otherwise specified.

That being said, a noncompetition agreement is only enforceable as long as the employer has a legitimate business interest to be protected. If the employer cannot do business within a certain area for reasons that are not your doing, then there is a good argument that there is no legitimate business interest to be protected. This is a tricky area of the law, however, and I'd need to review your contract and the facts of your situation to give you specific advice.

If you would like to discuss this matter further, please feel free to contact me at the below address(es) or telephone number.

/Christopher E. Ezold/
The Ezold Law Firm, P.C.
One Belmont Avenue,
Suite 501
Bala Cynwyd, PA 19004
(610) 660-5585

posted by Christopher Ezold  |  Aug 2, 2012 11:39 AM [EST]
Doris Dabrowski
The answer depends upon the exact wording of the non-compete agreement. Since non-compete agreements restrain free trade, they are strictly construed. If there is an ambiguity, courts interpret contracts to effect the intent of the parties. The absence of any genuine interest to be protected may be a factor in interpretation and application of the agreement.

Since I have not reviewed the particular documents and detailed facts, this answer can only provide general legal information. To obtain legal advice about your particular situation, contact me or another attorney to review the agreement and the particulars of the activity that arguably violates the agreement.

Doris Dabrowski
1525 Locust St., 14th floor
Philadelphia, Pa. 19102

posted by Doris Dabrowski  |  Aug 2, 2012 07:19 AM [EST]

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