Legal Question in Business Law in Nevada

Re: Non compete contracts

There are no simple answers to your questions. Generally, you would start first with the purchase agreement and look to the terms contained within that document.

The anti-compete clause would probably have to be signed by the "Team Member" to be binding upon that person. If a "Team Member" signed the anti-compete clause, then it would be binding after the person left the company. There is no black and white answer for these questions.

There are several Nevada Supreme Court cases dealing with anti-competition clauses and each case is decided individually based upon the specific facts.

If you have more questions, you may call my office to schedule a consultation. 614-3388. I charge $45 for the first half hour.

I hope you are still conducting your due diligence on the business because these are very simple issues to resolve. If you have already purchased, they become more difficult to resolve.

Information that you should know or bring with you to the consultation.

1. Copies of ALL documents signed by you in connection with the purchase of the company.

2. Gross Annual Revenue of business

3. Average annual costs to conduct business (tax returns for business for last 5 years generally answers these questions.)

4. Estimated $ amount of business lost to competing Team Member. Better if you know specific figures based upon lost contract bid, etc.

5. Practical issues, like whether you could do the business lost to competing team member.

6. Parameters of anti-compete clause, geographic area of restriction, duration, and specific type of work restricted.

7. Where customers are located.