Wht constitutes a violation of non-compete regarding a geographical restriction?

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Wht constitutes a violation of non-compete regarding a geographical restriction?

My wife is considering starting her own occupation therapy business. She signed a non-compete clause within a 5 mile radius of her company. She would like to contract to schools that are outside the 5 mile radius but our house is within 5 miles which is where her LLC company would be legally registered. Would that be considered a violation of the non-compete even though she wouldn’t be seeing patients within the 5 miles?

Asked on May 14, 2012 under Business Law, Minnesota

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

If the a--or especially THE--principal place of business of your wife's LLC will be within the restriction, she will likely be violating the terms of her non-competition agreement, even if her clients/patients are located outside that radius. If she is registering the LLC using your home address, and your home is within the restriction zone, that would almost certainly constitute a violation. She should consider renting an office--even a very small one, like part of another person's or business's office suite, that is clearly outside the exclusion zone and both registering her business from that address and using it as her business's address.


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