What is the validity of a non-compete if your previous employer relocates operations after you leave the company?

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What is the validity of a non-compete if your previous employer relocates operations after you leave the company?

I was working for a company that was on shaky ground and on the verge of closing when I joined. I was going to try and facilitate a number of changes to try and make them solvent again. When it was clear that no matter what was changed internally, they were too far in debt and going to go out of business. As a last resort I tried to convince them to merge with one of our competitors to try and salvage what they could. However, after that merger deal fell through with the other company, I made a decision to leave and go to work for the company that we were trying to merge with. My previous employer gave me the verbal OK to go to work for them as long as I agreed to sell into other markets and not to contact any of the customers that were his before I started with them. I agreed. Currently, the rumor is that he is going out of business and going to move his corporate office from WA state (where I worked for him) to his second manufacturing facility in AR. Does him moving the company, even after I have left, relieve me of any obligation in the non-compete?

Asked on February 24, 2011 under Employment Labor Law, Washington

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

I need to clarify: your non-compete agreement is verbal, correct? This question is best asked to an attorney in your state but generally speaking, verbal contracts are enforceable.  It is just sometimes difficult to prove the terms.  Also, under what is known as the Statute of Frauds, certain contracts must be in writing, like the sale of land.  It is my understanding that Washington State favors non-compete agreements and enforces then to the benefit of businesses.  If he were able to maintain the same clients (say it is a manufacturing business and being in another state would not really effect his business) then I believe that the agreement would still be enforceable.  Now, non-competes are not forever. So the length of time that you are required to abide by the terms matters.  It can not be forever.  Seek legal help.  Good luck. 


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