Layoff Voiding My Non-Compete

My employer may be laying me off due to lack of clients and work.

My non-compete states that I will not do business in the area that might compete with my current employer.

If I get layed off as stated above will it void my non-compete with my employer and allow me to take any work I can find in my field.

1 answer  |  asked Jun 20, 2001 9:01 PM [EST]  |  applies to Ohio

Answers (1)

Neil Klingshirn
An involuntary termination may not void a non-compete

The answer is that it depends on the language of your non-competition agreement. If it restricts your competition only in the event of a resignation or termination for cause, you will be free to compete. However, if it applies after termination, for whatever reason, you will not be released merely because the termination was involuntary.

You may be able to escape the non-compete another way, however, which is to claim that your employer no longer has any legitimate business interest to protect (the clients have gone). This is a difficult argument to make, however, and could trigger a lawsuit to find out if you are correct or not. Therefore, do not attempt it without consulting your own attorney beforehand. Above all, do not rely on this message to take a specific course of action.



posted by Neil Klingshirn  |  Jun 22, 2001 1:01 PM [EST]

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