When is itOK to break a non-compete clause?

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When is itOK to break a non-compete clause?

Currently using a home health care franchise that has had a government tax lien put on it. Been asking it’s caregivers to hold cashing their paychecks because of insufficient funds among other issues. We are going to quit the agency but don’t want to loose the caregivers. We would like to hire the caregivers privately but there is a non-compete clause. Is there a way to get out of it since the agency is in trouble and possibly closing down?

Asked on July 9, 2011 under Employment Labor Law, Tennessee

Answers:

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

Answered 9 years ago | Contributor

No lawyer is going to tell you to breach an agreement that you entered in to.  They will only tell you if the agreement is enforceable against you based upon the facts of the case.  I would seek help with this mater as the facts are very unique and the agreement needs to be read.  Here is my understanding of the law in Tennessee:Non-compete agreements are generally not favored by the courts because they are viewed as restraints on trade.
 

  • Courts look closely at the reasonableness of the agreement to determine if the agreement is enforceable.
     
  • In Tennessee, non-compete agreements or restrictive covenants are not always enforceable.
     
  • Tennessee courts look to the following factors to determine if non-compete agreements are enforceable:
     
    • Consideration given for the agreement.
       
    • Danger to the employer if there is no such agreement.
       
    • Economic hardship on the employee created by the covenant.
       
    • Public interest.
       
    • Scope of restrictions, including:
       
      1. Geographic location covered.
         
      2. Time period of restriction.
         
      3. Job description.
         

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