Is it possible to enforce non-competition in agreements?

Question

I have an employee in beauty salon who signed an agreement before she was employed not to join another company within 1 km radius within her previous shop. I am in a shop within 1 km from her and operating similar trade.

Like advice on whether this is enforceable in law ?

The agreement was signed more than 2 yrs ago, and the company did not give the employee a copy of this agreement, so she does not know what she has signed. Is this legal ?

Answer 1

I'm not an expert on this by ant stretch of the imagination, but I think it depends by state. The local laws will tell about what can and cannot be done with non-compete agreements. The company not giving her a copy is kind of iffy to prove. It's their word versus her word. The contract wil usually specify the time frame and it's usually after leaving the company, not from the time of signing. (As in 1 year after leaving the company.)

Of course, if they don't figure out where she went, then they won't know, but it sounds like a small area.

Answer 2

Non-compete's can be enforced but are difficult to do so. I would say she is obligated to resign. She has a legal right to employment, so non-compete agreements must be written so that they are limited to the firm's marketing area. A one kilometer radius is a very reasonable standard unless the entire market is nearly one kilometer and you live a great distance to the next market (such as if you lived in some states out west where the towns are really small and the distance to the next town is very great.)

She probably signed it as part of her new employment with that firm and really didn't pay any attention to it. They do not have to give her a copy she should have read it and retained it. I would say the contract is more likely to be enforced because she was with their firm for two years. She has built up a clientele and that clientele properly belongs to her prior employer.

The issue for you is that now that you are aware, they are entitled to any revenues she generates, or more properly the profits from it using their profit margins, not yours.

Any non-compete agreement signed as part of your initial employment agreement is a contract because hiring her was the consideration for the contract. Had she refused to sign, they could have refused to employ her. She was paid to sign it, in effect. She received two years wages that would not have been hers had she not signed that agreement. That is a lot of money that she would not have had a right to.

Answer 3

Non Compete agreements are enforcable, can she prove she did not get a copy, and if she didn't how does she know of it.
Her out is this, she has a right to work and earn a living- she took a job, she did not start a competing business.
What was the term of non compete - how many years.