If an employee signed a non compete and then the company stopped paying them when they ran out of money, can the employee then accept work with a competitor that they sought out? What is the limitation on preventing that employee from making a living?

Non compete and trade secret agreement signed with a company that is out of money for payroll. Limits to the agreement?

1 answer  |  asked Feb 8, 2015 12:17 PM [EST]  |  applies to Pennsylvania

Unlock Non-Compete Agreements: Keys to Escape

Answers (1)

Christopher Ezold
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, Delaware, New Jersey or Federal law applies, unless otherwise specified.

That being said, if the employer breaches the contract first by not paying you, then you likely will not have to abide by the noncompete. I say 'likely' because I'd need to see the contract and understand the circumstances first before giving a firm opinion. The real issue may be practical - if the company cannot pay its employees' wages, it likely cannot pay an attorney to sue you - and may not even be in business for your to compete with in the near future. Before exposing yourself to liability by competing, however, you should speak with an attorney.

/Christopher E. Ezold/

posted by Christopher Ezold  |  Feb 9, 2015 07:44 AM [EST]

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