Competition without any non-compete clause

Dear Mel:
I have worked for a local computer repair company for about 8 months. I never signed a non-competition agreement of any kind. My former boss kept demanding that I buy him out as he has moved away. I was not comfortable doing so on his terms. Absent any non-competition contract or agreement, is there any reason why I cannot start my own computer repair business? Is there any reason that I cannot contact clients that I worked for under my previous employer and offer my services? Today I received an email from said employer telling me that since I did not buy his business, I had no right to contact his clients, and that I was to cease doing so immediately. Please advise. Thank you for your consideration of this matter.

1 answer  |  asked Jan 29, 2008 4:35 PM [EST]  |  applies to Arizona

Unlock Non-Compete Agreements: Keys to Escape

Answers (1)

Francis Fanning
Competition is perfectly legal

In the absence of a non-compete agreement you are free to compete with a former employer. Starting your own computer repair business in the same community is perfectly legal.
Employers sometimes have employees sign anti-piracy agreements to keep them from soliciting existing clients while working for a competitor. This is not the same as a non-compete agreement, and in most cases the courts will enforce anti-piracy agreements more readily thean they would enforce a true non-compete agreement. Since you didn't sign such an agreement, your former employer would have to base his claim on some theory of unfair competition. While he may try to argue that he has a proprietary interest in the continuing business of these clients, it will be a weak argument if you were the one who serviced them and he is no longer actively engaged in the business himself. I can't guarantee that he will not try to assert such a claim, but he will bear the burden of proof.

posted by Francis Fanning  |  Jan 29, 2008 6:43 PM [EST]

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