Non-Compete as an independent distributor

Will non-compete hold up, if I did not sign anything regarding the bonus program? I signed an independent distributor agreement in California with a Company from Cleveland, Ohio 23 years ago. It says I cannot go to work for a competitor and work in the same geographical area for one year after leaving the co. I built a successful "downline" type business and was led to believe I could retire after 20 years and receive monetary compensation based on the "promotee" production. I only signed the distributor agreement.There was no bonus program agreement signed. Now they say because I have gone to work for a competitor (in a different state) that I have forfeited my "bonus" money. The wording found in the bonus brochure is "in our sole opinion of the Company, directly or indirectly in any business which competes with the business of the Company, you shall immediately forefeit, etc" This translates into in excess of $500,000.00 forfeited.Will this hold-up in court?

1 answer  |  asked May 2, 2009 2:56 PM [EST]  |  applies to California

Answers (1)

Arkady Itkin
Non compete agrements

Generally, non-compete agreements are invalid in California with some exceptions and unless they are narrowly construed to achieve a certain, legitimate business purpose. Considering the amount at steak, it would be a very good idea to review the agreement between you and the other party and discuss the specific facts of your business and your prior relationship with the company in Cleveland.

Thanks,

Arkady Itkin
San Francisco Employment Law Firm
http://www.sanfranciscoemploymentlawfirm.com

posted by Arkady Itkin  |  May 2, 2009 5:09 PM [EST]

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