Enforcing a Non-Compete Agreement
My previous employer (Job 'A') is a distributor of building materials where I worked as a sales representative. I am planning on going to work for one of my customers (Job 'B') who are licensed contractors/installers. They are, by no means, on the distribution side of this equation-simply installers. My job will include submiting bids based on the specifications that are called for on the bid lists. I did sign a non-compete before I started working (Job 'A'). Will this action be in violation of the non-compete agreement?
1 answer | asked Feb 1, 2007 4:28 PM [EST] | applies to Arizona
Answers (1)
Non-compete requires protectible interest
It sounds like the non-compete you signed would not extend to Job B, because they aren't in the business of selling building materials. But if your bids include both labor and materials and job B buys from A's competitor, job A may have an argument to make.
To be valid, a non-compete agreement must be necessary to protect a legitimate interest of the employer, and must be reasonably restricted in time and geographic scope. What is reasonable depends upon the facts regarding how business is conducted and what your duties are. The length of time considered reasonable is the time necessary for your replacement to be hired, trained and acquainted with your job and customers to protect the goodwill of the employer.
One of the problems with trying to answer your question is lack of information. What you call a non-compete agreement may be an anti-piracy agreement, which is altogether different. Such agreements are generally enforced by the courts.
If you are uncertain where you stand, I would suggest that you either ask job A for assurance that your new job won't violate the agreement, or consult with a lawyer who can review the agreement in detail.
posted by Francis Fanning | Feb 1, 2007 5:08 PM [EST]
It sounds like the non-compete you signed would not extend to Job B, because they aren't in the business of selling building materials. But if your bids include both labor and materials and job B buys from A's competitor, job A may have an argument to make.
To be valid, a non-compete agreement must be necessary to protect a legitimate interest of the employer, and must be reasonably restricted in time and geographic scope. What is reasonable depends upon the facts regarding how business is conducted and what your duties are. The length of time considered reasonable is the time necessary for your replacement to be hired, trained and acquainted with your job and customers to protect the goodwill of the employer.
One of the problems with trying to answer your question is lack of information. What you call a non-compete agreement may be an anti-piracy agreement, which is altogether different. Such agreements are generally enforced by the courts.
If you are uncertain where you stand, I would suggest that you either ask job A for assurance that your new job won't violate the agreement, or consult with a lawyer who can review the agreement in detail.
posted by Francis Fanning | Feb 1, 2007 5:08 PM [EST]
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