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What are the legal ramifications, if any, If I were to take over a service contract from a company that I am currently employed?

Port Jefferson Station, NY |

In the service contract there is a sentence that reads: In the event this Agreement is terminated, (the company that rewards the contract) will not hire any (company I work for) employee who was employed at (the company that rewards the contract) for a period of two years.

I work for a company that has a service contract. I have managed the account since its inception. They have asked me to form my own corporation, and take over as service provider, on my own, when the current contract expires.

What options do I have? How can they come after me or the business? Can they go after the place that wants me to take over the contract? I have never signed a contract from my current employer, and/or a non-compete.

Attorney Answers 4


  1. Best answer

    Best you speak with an employment attorney as the main concern [given no non-compete signed by you] would be what is called "tortious interference" with a contract (the one between your employer and the customer). You have a defense to the extent it appears they solicited you and not you seeking to steal away the customer for yourself. Moreover, the customer is breaching their own agreement with your employer by soliciting you and that is actionable as well. If you go down this path then make sure the customer gives you a guaranteed term so that they cannot drop you as soon as they or you get sued by the employer for the causes of action I mentioned. As part of that you should have them agree to indemnify and hold you harmless for any litigation and costs you incur if employer goes after you.

    My answer is not intended to be giving legal advice and this topic can be a complex area where the advice of a licensed attorney in your State should be obtained. Please click "helpful" or "best answer" if my answer added any value or add a "comment" if you have more info for me to help you get a better answer.


  2. From what you say, they would not come after you, but the company who wants to use you would be in breach of contract. That is not necessarily a bad thing, however they may be made to pay some kind of damages to your old company. Good luck!

    I am an Attorney-at-Law, licensed to practice law only in the state of California. Unless we have both signed a formal retainer agreement, you are not my client, and my discussion of issues does not constitute legal advice. Opinions expressed herein are those of the author, and do not necessarily represent the opinions of those who hold other opinions.


  3. Your only concern is what the spurned company can do to you and I agree that there is not much. With you not being signed to a contract and obviously not having signed on to a non-compete clause, you should be free and clear to forge ahead.
    Let the other guys worry about themselves, I say.
    Good luck moving on.

    Law Office Of Michael Marley
    Phone 917 853 4484


  4. The facts are confusing. If you never agreed to a non-compete or a restrictive covenant regarding your employment, then the restriction would most likely not be enforceable against you, however, there is a reason to be concerned that prior liabilities and warrantees(express or imp,IDE) may be assert able against you. Before you commit to anything, confer with an attorney.

    The responses provided to your questions are not legal advice, do not create any attorney client relationship, and are provided for informational purposes only.