Legal Question in Business Law in Wisconsin
Non Competite Agreement (2-year) Can I get out and start my own business?
I signed a non competite agreement several years back that in part states that if I leave this present company's employment for any reason that I cannot engage in the same business. I found out that this company has been cheating me out of my full commissions and further has cashed checks (known to have been sent in error) from current Clients. Not only do they cheat me but also our clients. Over the past 2 years most of the salaried and hourly employees have left due to ethical and monetary (promises made but not kept) problems. I never had a chance to read the non competite agreement. It was "sign it or you do not get your pay check and your employment will be terminated." Iam on commission only (no salary or draw). This envolves a Service (Executive search & placement) sold primarly to the Consumer Products Industry. As I have been in the business for 5-years it would be hard if not impossible to do anything else and maintain a high 5-figure income. How can I get out of this without incredible legal trouble and lawyer bills.
2 Answers from Attorneys
Re: Non Competite Agreement (2-year) Can I get out and start my own business?
You appear to have multiple defenses if your employer were to try to enforce the non-compete. However, you appear averse to litigation.
Given the context, you would have virtual immunity if you moved to California, where non-competes in this kind of situation are not enforced. Moving to another jurisdiction would likely avoid litigation anyway. It is, of course, possible that the employer forces its employees to sign these agreements "in terrorem" and without real intent to pursue departing employees. If you stay where you are living, you might have to test the agreement in court unless you can find another line of work.
Re: Non Competite Agreement (2-year) Can I get out and start my own business?
Non-compete agreements must be reasonable with regard to geography and duration. A non-compete that does not specify a time limit or one that specifies an "unreasonable" time limit may be ruled unenforceable. Additionally, a non-compete that does not specify a geographic boundary or one that is overbroad may also be ruled unenforceable. Aside from these potential challenges, you may also claim a breach of contract by your employer with regard to the commissions. If you posturedf with regard to a lawsuit, it is possible they may agree to modify the terms of the non-compete. For example, your non-compete may be modified to include only terms preventing you from working with companies that you eworked with for your current employer for a one year period. That would allow you to begin your own business until the non-compete expired.
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