Company merged with another now goes by different name

My current employer merged with a larger company and no longer has the same name. It goes by a new LLC created after/ for the merger. I had signed a contract initially prior to the merger that had a non compete with particular restrictions in timing and by geography. However, there was NO Language written about assignment to a future company. Since my former employer currently does not exist ( does not write my checks) is the non compete applicable. Also there have been significant compensation changes that are distinctly aberrant from the contract I signed. I have never signed any new contract extension or any representation acknowledging the new company nor its new compensation changes. Thanks for your feedback

1 answer  |  asked Sep 12, 2013 6:17 PM [EST]  |  applies to Indiana

Answers (1)

Neil Klingshirn
Whether your current employer can enforce a non-compete that you entered into with a former employer, and whether the compensation changes offer a way out of the non-compete, are issues of state law. I only know Ohio law. This answer will be helpful only to the extent that Indiana law is similar to Ohio law.

In a merger, the surviving company (your current employer) steps into the shoes of the merged company (old employer) as a matter of law, and acquires all of the rights of the old employer. Therefore, current employer would have the right to enforce your non-compete with merged employer, if you were in Ohio.

As to compensation changes, if your employer (current or old) changed it in a material, adverse way, like cut it in half, you would have a choice of two remedies. One is known as the antecedent breach by the employer (e.g., a compensation change), which excuses your subsequent breach of the non-compete. The other remedy is rescission, where the law treats the entire agreement as though it never existed. However, both the employer's promise as to pay and your non-compete need to in the same agreement for either of these defenses to apply.

Before you go far in reliance on any of these ideas, get particularized advice from an Indiana attorney. If you are talking about a contract defense, it assumes a breach, which can be big legal trouble.

posted by Neil Klingshirn  |  Sep 23, 2013 06:59 AM [EST]

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