I have purchased a business.

I purchased a business from a family. The son and grandson of the people I purchased my business from have opened an competing business in the same city. The son has contacted several of my customers. What recourse do I have. I have a NON COMPETE agreement in my purchase agreement for 10 years. It has only been 4 years.

1 answer  |  asked Sep 1, 2011 11:53 PM [EST]  |  applies to California

Answers (1)

Marilynn Mika Spencer
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Thank you for contacting The Spencer Law Firm!

I understand how frustrating this situation is. Oral and written contracts (agreements) are usually, but not always, enforceable. The extent to which they are enforced varies depending on the language in the contract and the subject matter of the contract.

California law disfavors non-compete agreements, which means that even if you and another party enter into that kind of agreement, a court is unlikely to enforce it. The California Business and Professions Code section 16600 states "Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void." Therefore, almost all non-compete agreements that attempt to restrict individuals in their work will be unenforceable.

There are some exceptions. Business-to-business non-compete agreements have a better chance of being enforced, but even these are disfavored.

California allows businesses to protect trade secrets and allows businesses to take certain other actions for their own protection.

You should discuss the specifics of your situation with an attorney who practices business law or employment law. The attorney will certainly need to see the contract you want to enforce.

This office represents clients in employment and labor law matters.  If you are seeking legal representation for an employment or labor law matter, you may call our office at (619) 233-1313 to schedule an appointment for a telephone intake.  The scheduling call will take only a few minutes; the intake appointment will take 15 to 20 minutes.

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Thank you.

Marilynn Mika SpencerManaging AttorneyThe Spencer Law Firm 

Marilynn Mika Spencer is licensed to practice law before all of the state and federal courts in California, and can appear before administrative agencies throughout the country. 

posted by Marilynn Mika Spencer  |  Sep 2, 2011 11:21 AM [EST]

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