Legal Question in Business Law in North Carolina

I work for a mortgage broker located in NY and signed a nationwide, 5 year non-compete when I took the position. I recently learned that the broker is in process of merging with another company and becoming a direct lender. I specifically took this position because I only wanted to broker loans. Questions I have are 1) is a 5 year nationwide non-compete enforceable and 2) is the non-compete still valid once the merger is complete and the broker becomes a direct lender.

Asked on 4/02/14, 9:45 pm

1 Answer from Attorneys

Ellen Bluestone Bluestone Law, PLLC

Without reading the contract you signed it's difficult to know if the contract becomes invalid with the merger. Regarding the non-compete clause, courts will only enforce them if they are written in a way that is deemed reasonable, both in duration and geographic scope, and is not contrary to public policy in that it doesn't restrict normal business competition or prevent someone from making a livelihood. That said, I am not sure how the courts in NY have ruled on non-compete clauses and I am not familiar with industry standards for mortgage brokers. You should have a NY attorney with contract experience review yours. Generally, it sounds as if the clause may be too broad in both geographic scope and duration to be enforceable, but, again, without reading the language of the contract it's too hard to know. Hope this is helpful.

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Answered on 4/03/14, 8:05 am

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