Do NON-COMPETE clauses hold up in court?

[bigbet1234]

Is there a bullet proof non-compete? Here is the non-compete I have, seems there are many loop holes. Thought about possibly being a silent owner.

"Seller will not compete or assist others in competing with the business for a period of 3 years, or within 500 miles. Including a prohibition of marketing to existing clients for 3 years. Competeing includes resale or use of methods, ingredients, or trade secrets including client list of current or former purchasers or agents for purchasers"

So if I open a similar business, revamped, with new methods, ingridients, no trade secrets and get my own clients I am good?

 

[wolfie_cr]

multiple courts all around the world rutinely dismiss these things because you simply have the right to work

now I imagine when you sold your business, its implicit that it comes with customers that are loyal to the brand and proprietary recipes, THAT specifically I wouldnt mess with

 

[seanm0520]

Not sure why they'd be in a contract if they wouldn't hold up...

 

[bigbet1234]

As wolfie said, you have the right to work.

There really isn't a customer list perse, but there was restaurants, regulars, etc. that I wouldn't even mess with.

It'd be very simple and basic but a cash cow

 

[wolfie_cr]

Not sure why they'd be in a contract if they wouldn't hold up...

plenty of examples of unenforceable clauses, hand me a piece of paper that says that I allow you to shoot me ........and then , if you go through, you will end up in jail

thats why they put things like 'if any of the clauses of this contracts is found to be non enforceable, that doesnt invalidate the rest of the contract'

NOTE: I am not a lawyer

 

[Seymour]

My buddy has been out of work all year due to a non compete - of course the previous company is holding about 500k in commissions over his head - but yeah theyre legal - to the extent I cant say

 

[bigbet1234]

It is not the same product, but is in the same field. No ingredients, methods, nothing.

 

[bigbet1234]

My buddy has been out of work all year due to a non compete - of course the previous company is holding about 500k in commissions over his head - but yeah theyre legal - to the extent I cant say

Seymour, what do you think about the non-compete above I referenced?

 

[bigbet1234]

I have to speak to an attorney. I thought about putting it in a family memebers name

 

[wolfie_cr]

My buddy has been out of work all year due to a non compete - of course the previous company is holding about 500k in commissions over his head - but yeah theyre legal - to the extent I cant say

Of course that is one way to deter you from breaking them , legal or not

http://en.wikipedia.org/wiki/Non-compete_clause for a quick/basic article, for example in California they are automatically void (except for specific cases)

 

[Seymour]

Bigbet, I really don't like to give any advice on legal issues I know nothing - labor and employment law is something I know nothing about - I didn't even take labor law in law school so I can't even give u a cursory answer - ask me about foreclosure, tax deeds, judgments and I can help u - i don't even have a friend to ask that would know

 

[seanm0520]

I'm not a lawyer either and I'm not arguing you wolfie but I've seen in instances, with some of my friends, where they were an inch away from lawyers and suits up the ass because of non-compete clauses. I say if a company is willing to go that mile over them, don't fuck with it. Not worth it.

 

[Santo]

They can be enforceable. The smartest thing you said in this thread is getting an attorney's advice. Do that, and see what assurances they'll give you about their advice.

 

[Willie99]

500 miles seems unenforceable for a bakery

many non-compete clauses will be thrown out, but not all

did you take paper?

 

[seanm0520]

Yeah, it certainly depends on the field. My buddies that almost ran into this are in the biotech and protein fields.

 

[Betallsports]

BB, just come to Long Island ... We would clean Up

and there are some good places around here that do the type of Cakes you do
But if you Undercut them, $$$$$$$$$$$

 

[KennyB]

They have to be reasonable. 500 miles seems like too much. The biggest problem with a non-compete is trying to enforce it. I have seen cases where clients of mine have spent $30k to enforce it and then two years later ended up with a paper judgment which never got paid. You do have the right to obtain injunctive relief but that takes time and costs money.

 

[aceduecetrey]

I think that if you sold the business to someone who you told you would not compete, then it is wrong to go back on your word. If it is really something different, why not go the buyer and tell him your plans and see how he reacts.

 

[GasMan]

500 miles - too big an area
3 years? No way will that hold up

non compete needs to be reasonable. 1 year, 2 max if it is an intellectual property type agreement.

 

[KennyB]

2 years is usually the max, at least in Florida it is.