Q: A prospective employer wants me to sign a non-compete contract for 2 years 350mile radius after I leave the company.
This is a commission based sales job in in musical instrument retail sales company similar to Guitar Center and Sweetwater. It is 90% on-line and 10% local business. According to the terms, I would not be allowed to work at a local competitor for 2 years and an online competitor for 1year. I am also a musician and change equipment frequently. The contract states I can not buy used gear from any past, present or future customer. Sounds like basically anyone that has or will go on the internet. Are these term enforceable or legal?
A: The Courts analyze a covenant-not-to-compete with respect to reasonableness. They will take into account both the length and geographic breadth of the covenant. However, you do a right to make a living.
The two year length may be a bit long given the situation proposed. But it is not out of the question. Also a 350 mile radius would probably be found to be reasonable.
The issue is the Internet. Courts are mixed. Some Federal Courts in certain cases have found that a covenant can be applied there. However, other Courts have found that since the Internet is "everywhere," then the covenant in essence keeps you for working in that industry since anyone in the world could be a prospective customer.
Obviously, working with prior customers of your employer (even if solicited) is a big NO.
Covenants such as this can result in very costly litigation and one risks a monetary judgment. I would suggest that you have a formal consultation with an attorney who can look at your specific facts and explain options.
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