Evans, GA asked in Business Law, Contracts and Employment Law for Georgia

Q: Noncompete enforceable? Sold my Georgia business, sale contract says Pennsylvania jurisdiction, 4 employees in GA now

Never did Bill of Sale, only an asset purchase agreement. They breached multiple items of the sale agreement. Have asset sale agreement and employment agreement with Buyer. They changed me from 20 hrs/week salaried manager to hourly worker as needed and haven’t given me any work in two weeks now. Contract says can only terminate for cause-violating noncompete/nondisclosure/fraud for 4 years, and only with written notice of 15 days to cure. Their actions effectively terminate without terminating. Noncompete is for 1 year in North America for doing basically anything in my industry or helping others do anything in the industry. Can I pursue this in Georgia and not Pennsylvania? Do they have to sue me in Georgia?

1 Lawyer Answer
Paul C. Jensen Jr.
Paul C. Jensen Jr.

A: It depends. Both Georgia and Pennsylvania courts will enforce valid restrictive covenants. Generally, to be enforceable, non-compete agreements must be reasonable as to time, geography, and activities restricted. In addition, courts are generally more tolerant of broad restrictions in a non-compete agreement executed in connection with the sale of a business than in and ordinary employer-employee context. Likewise, in all but the most unusual cases, courts will uphold a choice of forum clause in a contract.

Based upon your question, it appears you believe that the purchaser is in material breach of the agreement of sale. Therefore, I would highly recommend retaining a lawyer in your jurisdiction to review the agreement and the facts of your case to determine the appropriate course of action, including what forum in which to bring any potential action.

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