If a company does not pay severance money owed to an employee, does it void a non-compete that was part of the agreement?

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If a company does not pay severance money owed to an employee, does it void a non-compete that was part of the agreement?

Asked on August 7, 2011 Pennsylvania

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

A severance package given an employee upon termination is typically not required under the laws of most states in this country. Severance packages typically depend upon the policies of the employer as well as custom and practice in the industry that the employer is in.

Most states have laws stating that non-competition agreements between employers and employees are "void" against public policy. The rationale is that public policy in this country demands that every former employee is entitled to seek employment to help themself and their family.

Assuming you have an agreement that your former employer is to pay you a severance but does not, the non-compete clause which is part of the severance package is unenforceable. Even if the severance was paid, I do not believe that the non-compete clause is valid in any event due to it being in violation of public policy.

You should consult with a labor law attorney about your situation.

Good luck.

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

A severance package given an employee upon termination is typically not required under the laws of most states in this country. Severance packages typically depend upon the policies of the employer as well as custom and practice in the industry that the employer is in.

Most states have laws stating that non-competition agreements between employers and employees are "void" against public policy. The rationale is that public policy in this country demands that every former employee is entitled to seek employment to help themself and their family.

Assuming you have an agreement that your former employer is to pay you a severance but does not, the non-compete clause which is part of the severance package is unenforceable. Even if the severance was paid, I do not believe that the non-compete clause is valid in any event due to it being in violation of public policy.

You should consult with a labor law attorney about your situation.

Good luck.


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