1) I resigned from Company A, the company which I am referring to my signing the non-compete with, five months ago and joined Company B located in another state. One month ago I resigned from Company B.
2) Since resigning from Company B, I have registered my own company in Florida, where I and Company A are located both within the non-compete radius. My company offers the same services as Company A.
3) I am an employee (W-2) of my company, but I am not placing myself on any projects. Instead, I want to place people (who are not obligated to the non-compete) on projects within the non-compete radius.
4) Any necessary definitions:
"Restricted Period" means the period of employment and a period extending one year from the termination of Employee's employment with the Employer for any reason whatsoever.
5) This is the non-compete clause:
"Employee understands and agrees that during the Restricted Period Employee will not provide Protected Services to any Person providing Protected Services within a 25 mile radius of the downtown center of any city in the United States or foreign country in which Employer provides Protected Services to a Protected Client."
Would I be violating this clause if I start placing employees (excluding myself) within the non-compete radius?
There is a material fact missing. In order to evaluate this matter one needs to know the state for which the underlying non-compete was signed and the context of the non-compete provision. If the non-compete arose out of an employment relationship, where the employee was not an equity holder, any non-compete provision may be unenforceable. Ultimately, the law of the state in which the employment took place will dictate the result.
generally speaking, the law does not like covenants not compete. They tend to be strictly construed. Although you left out a number of important facts, as a general proposition you cannot be denied a livelihood. It may be that the radius moderated, or possibly do restriction be modified in some other way, but what seems certain is that would be most unwise for you to compete in the manner in which the contract precludes employment; in this case, far better to negotiate and discuss than to find yourself in the middle of litigation and up against an injunction. In this particular case, you would do well to consult a lawyer in your home state as to the enforceability.
Lawsuit / Dispute Attorney
Check the statute in your state. Many are very specific and require certain language in covenants not to compete. As a general rule courts disfavor them, however if your former employer dotted his i's and crossed this t's you may be out of luck.
More than likely. The real question is can you afford the fight.
Non-compete agreements in Florida require that the agreement be valid for scope, geographic location, and term. Even if the agreements are not valid, a Florida court will limit the agreement to something that is not valid. In other states, if the agreement is not valid, it can be thrown out as an invalid agreement.
The geographic scoop seems to be valid, the question is that is a protected service and for how long is the restriction.
Generally, we advise clients that you have to be ready to spend 10,000 to fight a non-compete agreement, and if you cannot, then you might as well act as if they are valid no mater what they say. Although it is possible to get back your fees if you are successful, the problem is the way the statute is written, each side will be successful and the judge is not likely to award fees to the violator. I have several articles on employee non-compete agreements on my Legal blog that you may want to review some of the articles I have written on the topic. I have provided a link below to the articles
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One of the facts missing is whether "protected client" is defined in the non-compete agreement. Are protected clients only the clients that Company A has in its portfolio? Or are protected clients all existing, prospective, or possible future clients? Does Company A give every potential customer within the geographic radius a protected client status?
You may have some leeway if the term "protected client" is narrowed. If Company A is only protecting its existing portfolio, they just don't want you steal their clients. In that case, it's totally up to you to find clients in the non-compete geographic radius if you're seeking clients who are not or were never serviced by Company A.
It's still a gamble though. And it seems there are only 5 or 6 months remaining on your non-compete agreement.
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