Can my non compete effect a company fully owned and operated by my wife?

I have recently left my company (x) which is in Software consulting. My wife fully owns and operates a software consulting company (y). She had previously done business with Company x.
Now company x has sent me a letter indicating that I may have violated the non-compete agreement I had with them. I am currently working in another software consulting company which has no relationship in with company x.

My question is can my wifes company come under the influence of the contract I signed with company x?

2 answers  |  asked Jul 2, 2004 10:53 AM [EST]  |  applies to Texas

Answers (2)

Joe Gilbreath
Covenant not to compete.

See the Texas Business and Commerse Code, Section 15.50 for specific requirements in Texas for the enforceability of "covenants not to compete", as we in Texas refer to non-compete agreements. There are also numerous cases interpreting such provisions and the agreements they concern. You need Texas counsel to examine those provisions and cases as well as whether there is a valid contract for the covenant.(For example employment-at-will status can impact an agreement containing the non-complete provision.) As was suggested by Ms. Harris, the issue is not whether your agreement applied to dealings with your spouse, but whether it applies at all. The mere fact that it is your wife who owns the company that seeks your service does not matter in your dealing with a private entity, unless the language of the agreement provides otherwise. Our firm can give you advice on the strength and validity of your obligations, if any, under a covenant not to complete, and can access the viabilty of any remedy that might be used by your former employer. Thanks for you inquirey.

posted by Joe Gilbreath  |  Jul 2, 2004 3:23 PM [EST]
Margaret A. Harris
Non Compete

The first question is whether your non-compete agreement is even valid at all. The law about non-compete agreements in Texas is very strict, and there are a lot of these agreements out there that are not enforceable.

If your agreement is valid, yes it would apply to working for your wife's company -- if that company is somehow in competition with your former employer. If your wife's company were to hire you, it too could be sued for what we lawyers call "tortious interference."

So, you need a legal opinion about your non-compete clause. Call one of the lawyers in Texas who are on this site's list.

posted by Margaret A. Harris  |  Jul 2, 2004 12:44 PM [EST]

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