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Non Compete Clauses

George AllenGeorge Allen 7 Posts
in HR & Employment Law Vote Up0Vote Down
We have an employee who signed an employment agreement with another prior employer which states that upon termination of employment, if she wants to acquire the firm's clients, she would need to pay 100% of the prior annual billing for existing clients and if she picked up any clients that were past clients of the firm or may be prospective clients of the firm she would also be required to pay 100% of billings for up to 18 months after she left the firm. Does anyone have any information on whether this non compete clause would be enforceable through the courts?
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  • 2 Comments sorted by Votes Date Added
  • Don DDon D 9,834 Posts
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    (1) The non-compete seems to say that any client he/she picks up will cost her. You say prior clients, current clients and prospective clients of the former company. Gracious! That's everybody on earth!
    (2) This is one for an attorney.
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  • Margaret MorfordMargaret Morford 1,143 Posts
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    George,

    Whether a non-compete is enforceable depends on how the courts in your specific state have been ruling. Your state courts determine what is reasobable as to the scope and/or duration of the non-compete. Then if the courts find that the non-compete is unreasonable as to scope and/or duration, do they void the whole agreement or just the part they find unreasonable? Don D is right. You need a lawyer, or at least your new employee needs a lawyer.

    Margaret Morford
    theHRedge
    615-371-8200
    [email]mmorford@mleesmith.com[/email]
    [url]http://www.thehredge.net[/url]
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