Is a non-compete valid if the employer breaches the agreement?
As part of a hi-tech development deal, XYC (of which I own 30%) hires me as CTO (administer and develop) at a salary that increases with CPI. As part of emloyment contract, I agree to assign all inventions to XYZ.
In a later year, I realized that my salary has not been adjusted in 3 years. Co. accountant concurs: I'm owed $30K (base salary ~100k).
At the same time, 'angel' investor sees Co needs more $ to continue. Offers to put $ in if I reduce my ownership. I ask, 'where's my $30K?' "You'll not get $30K unless you agree to contribute stock." $30K has not been paid, despite 90 days, written notice, etc.
Question: if I terminate my employmeny because of this breach, is the entire employment agreement (assignment, 2 year non-compete) cancelled? Can they remedy after I terminate my employment?
Any suggestions?
Andrew
Answers (1)
A major mistake for an attorney to make is to interprete a contract without seeing the contract. However, with that caveat, it would seem that you at least have a good argument for voiding the contract based on the employer's breach.
New York State courts are generally hostile to non-compete clauses, but your type of position is the very type of position that would cause a court to enforce the non-compete clause. So, you should be very careful about bolting without knowing exactly what you are getting into. As I have told many client, when you sign a contract with a non-compete clause, you are essentially buying a lawsuit. Your type of technical expertise would seem to be the type of thing that would almost guarantee a lawsuit if you suddenly left and joined a competitor.
I hope this helps.
Sincerely,
David M. Lira
posted by David M. Lira | Feb 21, 2001 12:48 PM [EST]
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