Legal Question in Intellectual Property in Massachusetts
Non Compete Agreement is the original still legal after a company restructures?
I signed a non compete agreement, 7 years ago, when I started with an alarm company. In the interim the company went from being run as a trust to an LLC. I was never given a new non compete agreement to sign after the restructuring. Is the original non compete still legal or is it nul and void?
2 Answers from Attorneys
Re: Non Compete Agreement is the original still legal after a company restructur
It depends on the wording of the noncompete. In general, however, most noncompetes state that the company can assign the agreement or that is binding to sucessors and assigns. The bigger issue is the scope of the noncompete since it must be reasonable to protect the legitimate business interest of the company and no more restrictive than that.
Re: Non Compete Agreement is the original still legal after a company restructur
You may be fairly certain that the reorganization documents include an assumption of liabilities and assets by the new entity -- don't count on this kind of technicality to get you out of a non-competition agreement. Much more important is an analysis of the agreement to ensure that the geographic scope and time-frame terms are reasonable. In any case, you would be prohibited from using the company's proprietary information (like customer lists) to compete against it even absent a non-competition agreement.
Best wishes,
LDWG