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WV Non-compete agreement

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WV Non-compete agreement Empty WV Non-compete agreement

Post  buckeyedesigns Sun Sep 28, 2008 1:36 am

Good evening all! I have a question that involves a situation my brother-in-law is facing. He quit his job at the end of August working for a company based in Ohio. He was serving as a consultant doing work at car dealerships. He quit because, as he says, he was spoken to abusively concerning his sales. He was doing well with what he was making; his Ohio-based "employer" was not. The area that he was working was relatively unworked prior to his efforts. He established good relationships with his clientele and wants to pursue the business. He had signed a non-compete, non disclosure agreement back in May. The agreement forbids him from competing for 2 years and within 500 miles. It would appear that the latter is excessive. Would that cause the agreement to be null and void? Also, the language of the non-compete forbids him from competing within 500 miles of a specific city but there is no state specified. Would that error cause problems with the agreement? My bro-in-law wants to pursue the business he was in, but needs to know where he stands legally. Any help would be greatly appreciated.

Thanks.

Michael J. Baird
This post moved to employment law.

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WV Non-compete agreement Empty non compete employment contracts

Post  Eric Sun Sep 28, 2008 3:53 am

A court will look at the length of the term and the geographic scope when determining whether or not to uphold an employee-employer non compete agreement. The court will also examine any equitable issues related to the agreement, such as whether the employee was induced to leave a job and or move to a new place in reliance on an employment offer before being informed that he is required to sign the agreement.

If the employee was already working under an employment contract and the employer coerced the employee to sign a non compete agreement without offering any additional consideration in exchange for the agreement a court might find that the non compete agreement is void for lack of said consideration.

The courts, generally, are more interested in the public’s ability to obtain the services that the employee can render than they are in the employees right to work in the area covered in the agreement. If an employee subject to a contractual non compete is the only provider of a certain vital public service in a geographical area a court will be more likely to void the agreement

Courts have the ability to strip a non compete agreement of offending clauses or void the thing altogether.

Each case is handled in a very fact specific way, so there is really no way to establish with any certainty what a court will do with a challenged non compete agreement. It should be said that courts generally dislike getting involved in contractual relationships between private parties unless there has been some form of fraud or misrepresentation involved in the forming of the contract. Freedom to contract is pretty much the law of the land, as it were.

Only an attorney working in the jurisdiction in question can tell you with any degree of certainty what will happen if you challenge a non competition clause of an employment contract.

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Post  JoeC (McGruff) Sun Sep 28, 2008 4:06 am

Courts also look at bargaining power,any exculpatory clause in the contract indicating differently, should be viewed by a judge as violation of public policy. If he does so the whole contract becomes unconscionable,and gets thrown out. Along with unfair contract terms,some evidence of underlying deception by one party to the other or an inequity bargaining power I.E (Sign this you work,You don't sign this you don't work) is usually required to for a contract or provision to become void.
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WV Non-compete agreement Empty Re: WV Non-compete agreement

Post  bears00 Wed Oct 01, 2008 2:55 am

A few questions first.

Did he sign the non-compete, non-disclosure at the time of hire or at a later date?

If he signed it at a later date, what was given to him in exchange for his signature?

How old is he?

A good non-compete will address enforceability. In other words, should a court of law void one provision of this contract, it doesn't void the remainder.

Ohio has what is called blue pencil laws. In other words, the court has the right to redraw the contract to make it comply with statutes. So even if the non-compete is not legal, it would have to be COMPLETELY ILLEGAL all the way around to be thrown out.

I will say that in a business such as a car dealership, 500 miles DOES SEEM excessive.

Some things that Ohio courts consider:
1. Does the agreement protect the employer's legitimate business interests?
2. Is the restriction no greater than the employer's need to protect their interests?
3. Did the employee receive something in exchange for their signature.

BEWARE, the Ohio Supreme Court recently held that continued employment is enough to constitute consideration (something in exchange) for an employee's signature.
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