What are the legal ramifications of breaking a non-compete clause?

UPDATED: May 30, 2012

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What are the legal ramifications of breaking a non-compete clause?

I am working with one company and have found a competitor that pays better. I would like to work for both but the current company has a non-compete clause in their contract and I am sure the other one will as well. If I was found, what would be the legal ramifications of these in fractures outside of termination from both companies?

Asked on May 30, 2012 under Employment Labor Law, Ohio


S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

You would be sued for breach of contract for violating the noncompetitive provision.  If the company can prove lost profits by showing the loss of particular customers, the damages (monetary compensation) the company is seeking in its lawsuit for breach of contract could include that.  If you interfere with an existing contract between the company and a customer or if you induce breach of contract between a customer and the company, you would be liable for those actions. 

An alternative measure of damages might be that your contract with the noncompetitive provision might include liquidated damages.  This would be a fixed amount of damages (monetary compensation) if damages for breach of the contract would be difficult to ascertain.  If your employment contract with the noncompetitive provision has a liquidated damages provision, that is the amount the company would seek to recover for breach of contract.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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