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Ross Runkel

Break Your Non-Compete Agreement- Really!

By Carl Khalil, Esq.   Bio   email
www.BreakYourNonCompete.com 

            If you find yourself stuck in a non-compete agreement, you may immediately head to a lawyer.  Let’s say the non-compete clause prevents you from working for two years in your profession within a 25-mile radius of your former employer.  That sounds pretty reasonable and so a superficial review may suggest that all is lost. 

But a closer look, focusing most heavily on facts not shown on the face of the non-compete contract, may indicate that you may be able to escape the non-compete after all.  Let’s look at just three of at least 15 other ways to escape from your non-compete.

            *Did Your Employer Breach the Contract With You?  As a general rule, if your employer materially breached its obligations to you, then you are released from the non-compete.  This can happen many ways.  Your employer might have failed to pay you all commissions due, may have improperly denied you overtime pay, or may have failed to give you a promised bonus or advancement.

            *Did Your Employer Direct You to Engage in Illegal Conduct?  This may sound extreme, but a number of cases hold that if an employer directed you to engage in illegal conduct, the employer has “unclean hands” and may not enforce the non-compete.  The policy reason for this is that courts want to make it easier for employees to depart an employer where the employee is being used as an instrument of illegality. 

            To explore this option, a little expansive thinking may be in order.  For example, were you directed to engage in sales fraud, environmental violations, the creation of fraudulent accounting entries, or antitrust violations?  Or perhaps you were told to engage in illegal discrimination or overcharge customers.  The possibilities are almost limitless.

            *Did You Work Only Briefly for the Employer?  A number of cases hold that if you worked from a few to several months for an employer, then a non-compete against you is unenforceable.  Generally, non-competes will only be valid to protect against your taking trade secret or confidential business information or your ability to cause clients to follow you when you leave an employer.  The theory goes that if you work somewhere only briefly, you will likely not know much of their confidential information, nor have had time to develop a sufficient relationship with their customers to be able to sway them away with you.

            Numerous other defenses not apparent on the face of a non-compete also exist.  For example, many states will strike down a non-compete if you were fired, or at least consider that factor against enforcing the non-compete.  Others will void a non-compete where it was entered into only after you began work for the employer, unless you received a raise or other material benefit for signing it.  And, many courts invalidate non-competes that contain flat prohibitions on working for competitors, because such agreements could be construed as preventing you from doing tasks as simple as janitorial or receptionist work.

            In sum, the face of a non-compete tells half the story.  Intense digging for facts that may create defenses tells the other half.

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Editor: Ross Runkel, Professor of Law Emeritus. email Ross@LawMemo.Com, Phone 503-399-8028. Copyright LawMemo, Inc.