Are NON COMPETE CLAUSES ENFORCEABLE?

Question

I worked for the most successful Real Estate Office , I leave because I do not feel I am being compensated what Im worth, broker says that I must inactivate my license due to the non compete clause, it states that I cannot work in my line of work within 120 miles of the office for an additional 3 years!!!!. That is unreasonable! Any advice? This broker sees no wrong in taking peoples lively hoods away, if people arent happy, let them go,,dont tie their hands!

I reside in Alaska...

Yes, it is in the contract that I signed...however, I have been told that it is completley unreasonable because that would take me out of my realm of work and I would have to move to Bethel, and we know nothings selling there! :)

Answer 1

Non compete clauses are enforceable and very common. The more restricitive they are, however, the more likely they will be found to be unconscionable and held to be unenforceable. Yours borders on that. Three years is generally the outside amount of time a court will enforce such a clause. The 120 miles may or may not be reasonable based upon the saturation of business in that area.

The bottom line is that the clause will be judged by the custom of the area and previously upheld clauses. The "reasonableness" of the clause will be determined using the local standards.

My first impression is that the clause is not going to be upheld. But I am not familiar with the market and customs, so dont count on my opinion. You may want to compare this clause to those included in other agent contracts with different realtors. A local attorney who specializes in this kind of contract could certainly tell you what the chances of you prevailing may be. I suggest that you go that route and count on that answer over anything that might be posted here.

Answer 2

I'm not an attorney, but I do know that some non compete clauses can be overturned if they are found to be over reaching or unreasonable.

You should contact an attorney to see what legal action needs to be taken. If you just go ahead and practice, they can sue you for breaking the contract. You need to get a judge to overturn the clause before you begin practicing again.


1st 2 things I ever learned in business wrtr
1. NEVER sign anything without reading completely
2. NEVER sign anything I don't aggree with

Answer 3

Depends on where you are.

Some States allow almost any type of non-compete that the two parties agreed to sign, some restrict VERY strictly what types are enforceable.

Alaska is pretty easy-going about what types of non-compete are enforceable. If you want tout of it I'd speak to a labor lawyer familiar with them in a real-estate setting.

Richard

Answer 4

Hmmm. I once knew of a stock broker who taped a manager making overtly sexual comments to her. She liked to do some partying on the side with the guys in the office, but this was not recorded by them. For some reason, they never sued her over her non-compete when she left the firm.

Answer 5

First rule always read what you sign and have a copy, reread your signon contract and then you will know if there was such a clause! if there was you have to do what it says, however you can work out of the area of which it says, that means you may have to move or commute! you also should also seek legal consel! I hope this helps in some way?

Answer 6

They are fully enforceable and make perfect sense. You know the current clients of the company you left, their properties, and techniques. You can then work for a competitive company with all of this information and this could be very harmful for your old company.

Covenants not to compete are very normal parts of contracts especially in industries which involve a lot of intellectual property. I strongly warn you against engaging in competitive activities - you could get sued for a lot and have your license revoked entirely.

Answer 7

The licensing of the business may make a difference. For instance, a real estate broker's geographic area might be only the city, state or county in which he is registered or licensed. A stock broker may be licensed in several states, or nationwide. Licensure can be geographically defined. If you can determine that, you will answer your own question. Also, sometimes Articles of Incorporation state where the company is doing business.

Answer 8

Non-competes are enforceable if reasonable in duration, location and nature of the restriction. In every state I know of it is not reasonable to require a professional to give up his profession. See a local attorney.

Answer 9

Is it in your contract with him?

Odds are, it's not. If it isn't, he can't force it on you.

Or - get yourself fired. It probably can't be enforced then.

But you need a labor lawyer.