If upon my employment I signed a 2 year contract stating that I can’t compete but I got fired 2 months later, is it OK that I started my own advertizing business?

I worked for a advertising agency.

Asked on April 2, 2015 under Employment Labor Law, New York


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

Did you "only" receive employment in exchange for the non-competition clause or agreement, or did you receive some other "consideration" (something of value), like a bonus, reimbursement of expenses you otherwise would not have been reimbursed for, etc.?

As a general rule, if the only thing you were given in exchange for signing a non-competition agreement is employment (or continued employment, if already working there), then if they fire you, the noncompetition agreement is no longer binding, since by firing you, they took away or deprived you of the consideration (thing of value) that bound the agreement--a job. Also, equity (or fairness), which courts do take cognizance of, also mitigates against enforcing a noncompetition agreement when you are fired; it is inequitable to allow a company to preclude you from competing then deprive you of your job, leaving you with no practical way to support yourself.

However, if you received something other than employment in exchange for signing the agreement, like receiving some bonus or other payment at the same time, that indepedent consideration will still be effective to bind you to the agreement, so you would still be unable to compete.

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