If I’m found in violation of a non-compete, what can happen?

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If I’m found in violation of a non-compete, what can happen?

I am a salesman for a financial services company. I was an independent contractor for a firm for 3 years and during that time I built a book of business that compensates me $12,000 per month. With that firm, I signed a 3 year non-compete without a territory defined. My contract says that commissions will survive termination for any reason. Once I resigned from the firm, my employer said that I was in violation of my non-compete by working with a similar firm, in a different state. If I am found in violation of my non-compete, can the former employer withhold my $12,000 per month for the next 2.5 years? What could be the justification for not paying my commissions for work already performed?

Asked on January 27, 2016 under Employment Labor Law, Connecticut

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

1) You must be paid all earned but unpaid commissions (subject only to the usual set-offs: e.g. unpaid bills or bad debts, chargebacks for returns or refunds, etc.) unless the employment contract specifically said that you would forfeit them for a non-compete or other contract violation--but apparently, your contract does not say that.
2) If you violate a non-compete, your employer could:
a) Bring a lawsuit to get an injunction (court order) against you, forcing you to stop competing--if you violate it, you could be subject to sanctions from the court, which could fine you or even possibly order you imprisoned for contempt of court.
b) Sue you for monetary damages or compensation, such as forcing you to turn over to them the income you make from illegal competition, or any amounts which they can prove they would have received (e.g. sales made) but for your competition.


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