validity of non-compete when employer initiates termination

Hey MEL.

Basic question:
What are my odds of beating a non-compete agreement with an employer that terminated me due to economic downsizing?

Points of interest:
* Employee Agreement states that intent behind non-compete clause is to prevent competitors from luring away company employees after company makes a considerable investment in its employees. I was *not* lured away - I was terminated, and solely for economic reasons.

* Employee Agreement places restrictions on engaging as an "employee" or "consultant." What about if I form a new, competitive company? I believe this qualifies as a "principle." There is no mention of acting as a "principle" in my employee agreement.

* Employer is headquartered in MA, and I live and work in NY.

* Employer is aware of my idea to form a new competitive company and is preparing a new contract *permitting* me to do so, but with caveats (of course); i.e., I cannot engage current customers of my former employer in New England and RTP. They want me to sign it quickly. I have not yet done so. I feel it is a strong-arm attempt to close the gaping holes in the original Employee Agreement which, as I read it, doesn't cover this situation. I feel I should just ignore it and act as I will.

* I can fax my Employee Agreement and In-progress Contract upon request.

Any help you can provide will be greatly appreciated. Time is of the essence; this all came up *real fast* (just over a week ago), and my former employer wants a decision by 10/8/01.


-- Dave Hutton

1 answer  |  asked Oct 4, 2001 10:04 PM [EST]  |  applies to New York

Answers (1)

Joseph Heppt
Non-Competes in NY

New York courts look with disfavor upon noncompetition agreements. There is a litany of restrictions placed upon them in order for them to be enforceable. Based on the facts that you have provided, the enforceability of your noncompete is questionable. Naturally, the precise wording of the contract ultimately will be determinative.

I would be happy to discuss this with you further. You can contact me at (212) 973-0839.

posted by Joseph Heppt  |  Oct 5, 2001 08:50 AM [EST]

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