I live and work in WA State but my employer is in TN. Employment Agreement signed in 2012 has non-compete clause stating cannot conduct business 200 miles from my home. Agreement also stated employer was become S-Corp and I become w-2 employee as well as provide Medical coverage in 2013. Employer has failed to do either. Am I still held under the non-compete if I choose to quit?
Family Law Attorney
It depends. Most contracts will include a clause limiting the impact of provisions that are not legal, or breaches of the contract which can be segregated out. In the end, this part of the question will depend on the terms of the agreement, and cannot be addressed without a thorough review of the agreement. That being said, there might also be grounds for challenging the non-compete clause on its own. This will depend on the applicable law (TN or WA), as well as the circumstances and consideration provided when the agreement was made. You will certainly need to have this reviewed by an attorney to have a thorough answer.
This answer is offered as a public service for general information only and may not be relied upon as legal advice.
Generally, if you are a Washington state resident and work in Washington state, Washington state law will apply to that non-compete clause. When reviewing the enforceability of a non-compete clause, the first thing you examine is whether there was adequate consideration for the agreement. Did you get something in exchange for that clause? Adequate consideration would be the offer of a job, a promotion, a raise etc. If there is adequate consideration for the agreement, then you need to examine whether the terms and conditions of the non-compete clause are reasonably drafted to protect the employer's business. In order to assess the reasonability of the noncompete and analysis would have to be done of the industry in which you work, location of competitors, number of competitors, etc. If the clause is deemed reasonable and supported by adequate consideration, it would normally be binding upon the employee. Unless the agreement provides language to the contrary, they are generally enforceable even if the employee quits. With respect to the employer's failure to provide those items promised, if they weren't this consideration which supported the non-compete you might have a claim that the non-compete is not supported by adequate consideration. This is not an easy area for a quick answer. I would suggest you have counsel spend the time to read your agreement and investigate how the agreement was negotiated.
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