Legal Question in Employment Law in New Jersey

My husband and I work for the same company. We both had to sign non-compete clauses. I need to earn more money and am thinking about starting a business. The business I am thinking about starting is something that our organization did for a short time and then they closed it last September. My question is...if my company feels I am violating my non-compete clause (even though the non-compete says nothing about prior business), can they also accuse my husband of violating the non-compete clause if his name is not on the business and it is operated as a sole proprietor?


Asked on 6/15/10, 8:07 am

1 Answer from Attorneys

Randall Brett Law Office of Randall P. Brett

You are really asking two questions. The first involves whether the business you are considering will trigger the non-compete clause. Without knowing more about the business or seeing the actual language of the non-compete clause, I cannot offer an opinion on this question. For example, your employer may not have actually left the business but only put its plans on hold. Or, it may have sold the busines idea, products, licenses, etc. to another party and your movement into the same business would result in a conflict between your employer and the buyer.

The second question concerns the effect on your husband if you are accused of violating the non-compete clause. Here, the answer is clearer. You stated that you will do business as a sole proprietorship. Unless you are able to create a strong "firewall" between your business life and your personal life (very hard to do), your actions will likely be imputed to your husband. In other words, it will be assumed that he will benefit from your violation of the non-compete clause (assuming that you actually are violating it) and so should be held equally responsible for your violations.

You should consult with an attorney before you take any steps to form or start your business. Feel free to call my office if you would like to arrange for an appointment to review your documents and discuss this matter in more detail.

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Answered on 6/15/10, 12:07 pm


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