Legal Question in Employment Law in Alabama
Is this a Non compete issue?
As a term of employment I signed a NC with an Ala. employer several years ago. I work in portions of other states in the SE, for this firm. Later the company was sold to a Texas firm who in turn sold to a group of investors from Texas. The firm is a sales group representing several lines of material handling equipmnet. One of the lines is changing the method by which it's product is taken to market, as it feels it gets inadequate attention from multi-line sales firms. Rather than using general rep firms such as ours, such existing contracts are being terminated and replaced with direct/exclusive distributors. The contract with our firm WILL be terminated and an independant distributor WILL be set up cover all of the SE US. Currently our firm represents this line only in Al & TN.
There is an interest on the part of this line in setting me up as this direct/exclusive distributor. Would this be considered a competive situation as the existing contract would be terminated? Which state would have jursdiction and would there be any enforceability? Would any competive situation be eliminated if the existing firm was set up as a sub-distributor under me so that I simply became thier supplier?
1 Answer from Attorneys
Re: Is this a Non compete issue?
Your question, as you may have guessed, does not have a simple answer. The most important part of the response is what state's law applies to your situation. The short answer to that question is that "it depends." The first factor that has to be examined is whether or not your employment contract specifies any particular state's law. However, that does not end the inquiry. There is also case law that suggests that the state in which the noncompete agreement is sought to be enforced is the state whose law will control the interpretation of the agreement.
Practically, if you are severing your relationship with your employer, but they know that they have lost the business anyway, there is less likelihood that you will have any problems. However, your best course is going to be to consult with an attorney who handles cases of this type. I have handled these types of cases and if you would like to arrange a consultation, please feel free to contact us at [email protected].
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
