Do Pay Rate Issues Invalidate Non-Compete Agreements?

Hi Mel and Associates,

I am happy to find such a comprehensive set of Q/A on a variety of legal topics. My question is specific to non-compete contract.

I began working at the company in sales and was then contracted out as an onsite consultant. After six months the contract was renewed at a higher hourly pay rate. The new contract was signed and went into effect almost 3 months after the start date.

The employer does not want to pay me the back pay difference on the hourly rate. In general, does this invalidate the non-compete contract?

Thanks for your help.

2 answers  |  asked Oct 10, 2007 11:21 PM [EST]  |  applies to Pennsylvania

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Answers (2)

Christopher Ezold
Nonpayment of wages will likely void your noncompete agreement.

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, nonpayment of wages will likely void your noncompete agreement. The noncompete agreement is a contract; you give your promise not to compete, and in exchange your employer gives you employment. If your employer fails to live up to its end of the bargain; i.e. payment of wages for employment; then it is likely that your noncompete is not valid.

The above response depends on how the contract was drafted, the specific facts of your employment and whether or not you have a claim for wages. I do not have the documents to review, so I can only give you the general answer above.

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

posted by Christopher Ezold  |  Oct 12, 2007 08:25 AM [EST]
Harold Goldner
Can't interpret a contract without the contract

I'd like to answer your question, but, of course, I don't have the contract, so I can't tell you what the consequences are of the employer failing to pay the contract rate.

It is true that under certain circumstances, breach of a contract containing a restrictive covenant will void the covenant. That's not true in every instance, and a particular analysis of the facts and the contract (and covenant) are required.

If it's worth it to you to recover the difference in wages --- or worth it to determine whether you're free to ignore the noncompete, it ought to be worth it to see a lawyer in person.


posted by Harold Goldner  |  Oct 11, 2007 11:01 AM [EST]

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