commissions owed/non compete valid

i went to work for an insurance agency owned by my brother. i signed a three year non-compete contract that also spelled out my salary,commission and benefits. i left a good job in an unrelated field to work here. here is the problem... i have only received 1 commission checkin 10 months, the last one was 5 months ago. I have approx 5 k owed to me. if i quit due to this is a non-compete valid?

1 answer  |  asked Sep 14, 2004 4:57 PM [EST]  |  applies to Pennsylvania

Answers (1)

Christopher Ezold
The non-compete is probably not enforceable.

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, it is unlikely that the non-compete would be enforceable if you quit your job due to your employer's failure to pay wages. A non-competition agreement is a contract; your employer's failure to pay your commissions due is likely to be a material breach of that contract (although without reviewing the contract directly, I cannot state this conclusively). If your employer breaches the contract, you are no longer bound by it. There is caselaw holding that when an employer fails to pay its employees, its employees are no longer bound by their non-competition agreements.

Furthermore, it is vastly inequitable to allow an employer to prevent you from working for another entity when that employer won't pay you for your work. Pennsylvania courts do not like noncompetition agreements, and do not like preventing citizens from working for a living.

Based on the facts as you have stated them, I do not believe any court in this Commonwealth would enforce the noncompete against you. The biggest issue you will face, then, is whether you can prove the commissions are due and payable to you, in order to show that the non-compete should not be enforced.

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.
401 City Line Avenue,
Suite 904
Bala Cynwyd, PA 19004
(610) 660-5585

posted by Christopher Ezold  |  Sep 15, 2004 08:22 AM [EST]

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