Is a non-compete valid if the employer breaches the agreement?

As part of a hi-tech development deal, XYC (of which I own 30%) hires me as CTO (administer and develop) at a salary that increases with CPI. As part of emloyment contract, I agree to assign all inventions to XYZ.

In a later year, I realized that my salary has not been adjusted in 3 years. Co. accountant concurs: I'm owed $30K (base salary ~100k).

At the same time, 'angel' investor sees Co needs more $ to continue. Offers to put $ in if I reduce my ownership. I ask, 'where's my $30K?' "You'll not get $30K unless you agree to contribute stock." $30K has not been paid, despite 90 days, written notice, etc.

Question: if I terminate my employmeny because of this breach, is the entire employment agreement (assignment, 2 year non-compete) cancelled? Can they remedy after I terminate my employment?

Any suggestions?
Andrew

1 answer  |  asked Mar 15, 2001 8:29 PM [EST]  |  applies to New York

Unlock Non-Compete Agreements: Keys to Escape

Answers (1)

David M. Lira
Expect a lawsuit if you breach your non-compete.

A major mistake for an attorney to make is to interprete a contract without seeing the contract. However, with that caveat, it would seem that you at least have a good argument for voiding the contract based on the employer's breach.

New York State courts are generally hostile to non-compete clauses, but your type of position is the very type of position that would cause a court to enforce the non-compete clause. So, you should be very careful about bolting without knowing exactly what you are getting into. As I have told many client, when you sign a contract with a non-compete clause, you are essentially buying a lawsuit. Your type of technical expertise would seem to be the type of thing that would almost guarantee a lawsuit if you suddenly left and joined a competitor.

I hope this helps.

Sincerely,

David M. Lira

posted by David M. Lira  |  Feb 21, 2001 12:48 PM [EST]

Answer This Question

Sign In to Answer this Question

Related Questions with Answers

Have an Employment Law question?

Virginia Employment Lawyers

Sheri Abrams Sheri Abrams
Sheri R. Abrams PLLC
Oakton, VA
Edward Lowry Edward Lowry
MichieHamlett
Charlottesville, VA
Matthew Sutter Matthew Sutter
Sutter & Terpak, PLLC
Annandale, VA
Matthew Kaplan Matthew Kaplan
The Kaplan Law Firm
ARLINGTON, VA
Gerald Lutkenhaus Gerald Lutkenhaus
Virginia Workers Compensation & Disability Lawyer
Richmond, VA

more Virginia Employment Lawyers