Validity of non-compete?

I signed a non-compete agreement after 10 months or so with a company I worked at previously (the first time I left I did not have a non-compete agreement and did compete). I was given $500.00 as consideration. My employer it seems to me has actually broken the agreement by allowing me to work for a company associated with theirs (but seperate it is a seperate company). I have been paid by this company many times (even receiving a 1099 form from them) and the owner of my company actually signs the checks for this company because they own a portion of it.

Thus my questions are: is $500.00 enough consideration if you make over $100,000.00? Is the entire agreement invalid if they have broken at least part of it by allowing me to work for aonther business in the field when it is against the agreement?


1 answer  |  asked Aug 9, 2005 11:58 PM [EST]  |  applies to Pennsylvania

Answers (1)

Christopher Ezold
The noncompete may be invalid.

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 or Federal law apply, unless otherwise specified.

That being said, the noncompete agreement may be invalid. Depending on the wording, allowing you to work for another entity, even if related, may evince a waiver of the agreement. Furthermore, many judges may find that $500 is far too little compensation for giving up the right to work. Finally, allowing you to work elsewhere may show that the employer has no 'legitimate business interest' (which is legally required) for the noncompete to be effective.

If you would like to discuss this matter further, please feel free to contact me at the below address(es) or number.

/Christopher E. Ezold/
Nancy O'Mara Ezold, P.C.
One Belmont Avenue,
Suite 501
Bala Cynwyd, PA 19004
(610) 660-5585

posted by Christopher Ezold  |  Aug 10, 2005 09:37 AM [EST]

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