What are the consequences of violating a non-compete agreement?
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What are the consequences of violating a non-compete agreement?
The prospective company is listed in the agreement as a direct competitor for which I shall work not for 1 year following termination of employment. Should I worry about this?Should I accept the offer? It’s for more money. The new employer gave me a fairly reasonable amount of time to think it over before I sign and accept the offer. They’re not sure if I should be concern about all of this. Let’s say that the company does sue me for breaking the non-compete agreement. What could happen to me? Should I take that chance?
Asked on April 25, 2011 under Employment Labor Law, Alaska
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
A noncompete agreement is a contract; if you breach it, you may be sued by the other party. As a general matter, if you breach a noncompete agreement, the other party (your then-former employer) could seek a legal action to get an order barring you from working for a competitor--which means you'd then be without a job, since you would have given up a job to take the job with the competitor. They may also be able to sue you for money damages (e.g. for any losses you caused them owing to your knowledge and contacts and breach of the agreement). Not that the new employer doesn't need to fear liability--they did not sign the agreement, so worst case, they lose you as an employee but don't face anything else. Therefore they're not the ones who need to worry.
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