Expert Advice When You Need It Most

Noncompete agreement

Can I break my noncompete agreement if I am starting my own business?

Additional information
What is an injuction wiyout argument hearing? Regarding breach of noncompete contract?
Save

Attorney answers (4)

Reputation Level 13
If your new business violates your non-compete agreement, you are leaving yourself open to a lawsuit. Not all non-compete agreements will be honored by the courts. They must be reasonable as to time and territory. Have your agreement looked over by a Washington attorney for a more specific opinion.

Reputation Level 13
I agree with Mr. Rogak. An attorney will need to review your agreement to advise you on whether it is enforceable and the degree of risk you are taking on by competing with your prior employer. Some pertinent questions include whether you signed the agreement when you began your prior employment or at some later time, how long the noncompete period runs, the geographic scope of the agreement, what activities it prohibits, and what it is you plan to do with your new business. There may be some ambiguities as to whether your current activities violate the agreement. Keep in mind, too, that it will be expensive for your prior employer to hire an attorney to seek an injunction or to file an action concerning your breach of the agreement. The less concerned they are about what you are doing, the less likely they are to spend the money on a lawyer to enforce the agreement. One other thing: the Washington Uniform Trade Secrets Act prohibits you from using your prior employer's trade secrets even in the absence of a noncompete. Hope that helps. -Don

Reputation Level 9
I agree with both Mr. Rogak and Mr. Heyrich. But I wonder from your question if you think that the noncompete agreement might not apply if you start your own business, and only applies to moonlighting while you continue in your employment with the company. A noncompete agreement is specifically aimed at preventing employees, after leaving a company, from entering into a competing business (either starting their own or via employment with a competitor). But as noted, courts generally don't like them and will only enforce terms that are narrow and reasonable as to the geographical area within which the employee can't compete, and the length of time for which (s)he can't compete. This is why it's advisable to consult a local attorney who knows your specific state law in this area.
THE INFORMATION PRESENTED HERE IS GENERAL IN NATURE AND IS NOT INTENDED, NOR SHOULD IT BE CONSTRUED, AS LEGAL ADVICE. THIS POSTING DOES NOT CREATE ANY ATTORNEY-CLIENT RELATIONSHIP WITH THE AUTHOR (WHO IS ONLY ADMITTED TO PRACTICE IN THE STATES OF CALIFORNIA AND NEW YORK). FOR SPECIFIC ADVICE ABOUT YOUR PARTICULAR SITUATION, CONSULT YOUR ATTORNEY.

Reputation Level 11
The answer to this question is probably a bit more complex than you'd like. In general, like many times in the legal world, the answer is: "it depends."

In general, non-compete agreements are looked upon "disfavorably" by the courts. While these contracts can be legal and binding....since they are by definition a restriction on the economy and an individual's personal freedom, courts require that "every t be crossed and every i dotted" before giving them the final nod. Most states (including Washington) have strict requirements for non-compete agreements, requring them to only restrict employment for a certain time frame and within a certain area.

If you are a party to an enforceable and valid non-compete agreement, your violation will be a breach of the agreement, and you may be subjected to damages. When the former employer learns of the violation, he or she may bring an action against you to prevent your employment and recover damages.

You should probably consult with an attorney regarding your specific non-compete agreement to determine whether or not it is valid, or likely invalid. Then you can more fully appreciate your decision as to when and how you can proceed with your own business. A little work and investigation into this matter on the front end may save you a lot of headache, heartache and money in the long run.

I wrote an article for our firm about non-compete agreements specifically (but not related to any particular state's law - our firm practices in Washington and Louisiana). You can read it here:

http://blog.wolfelaw.com/search/label/Non-Compe...

Good luck.

Can't find what you're looking for? Ask a Lawyer

Get free answers from experienced attorneys.

 
Ask now