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  1. #1
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    Feb 2011
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    Default Non-Compete Clauses in North Carolina

    My question involves employment and labor law for the state of: North carolina.....

    My question involves labor and employment law for the state of: North Carolina and Non-Compete Clause that I signed.

    I started working for a new company in NC in November, i had to sign a Non-Compete Clause. It stated that I could not do any work within 100 miles of a North Carolina City. The questions I have are:

    1. The city in question is currently the only city they have started to market in, is the 100 miles still able to be held?

    2. I signed the form on 11/13/2010, he didnt file for his business license unitl 11/23/2010, so would it still be valid, even though he "claimed to represent" a company that was niot legally formed on 11/13/2010?

    3. I am not nor plan to use any company intellectual property, client information or training to start my own business, still a conflict? We did alot of cold-call marketing and even though i am not using those "potential" clients, I started a small company in another county.

    Just curious............mainly question #2. He is threatening lawyers, even though i have not officially opened my doors.

  2. #2
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    Apr 2007
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    Default Re: Non-Compete Clauses in North Carolina

    Your best bet would be to run the whole noncompete by an employment or contract attorney in your area for review & advice.

  3. #3
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    Default Re: Non-Compete Clauses in North Carolina

    Quote Quoting Hejl v. Hood, Hargett & Associates, Inc., 674 SE 2d 425 (N.C. App. 2009)
    Our Courts have held that a covenant not to compete is valid if the covenant is: "`(1) in writing, (2) entered into at the time and as a part of the contract of employment, (3) based on valuable considerations, (4) reasonable both as to time and territory embraced in the restrictions, (5) fair to the parties, and (6) not against public policy.'" Exterminating Co. v. Griffin and Exterminating Co. v. Jones, 258 N.C. 179, 181, 128 S.E.2d 139, 140-41 (1962) (quoting Asheville Associates v. Miller and Asheville Associates v. Berman, 255 N.C. 400, 402, 121 S.E.2d 593, 594. (1961)). "Where the covenant is entered into in connection with an employee's being hired for a job, it is generally held that `mutual promises of employer and employee furnish valuable considerations each to the other for the contract.'" Reynolds & Reynolds Co. v. Tart, 955 F.Supp. 547, 553 (W.D.N.C.1997) (quoting Greene Co. v. Kelley, 261 N.C. 166, 168, 134 S.E.2d 166, 167 (1964)). However, when the restrictive covenant is entered into after an already existing employment relationship, the covenant must be supported by "new consideration." Greene Co., 261 N.C. at 168, 134 S.E.2d at 167 (emphasis added) (citing Kadis v. Britt, 224 N.C. 154, 29 S.E.2d 543 (1944)).
    Non-competes are evaluated on a case-by-case basis. Depending upon the industry involved, a 100 mile radius may (or may not) be reasonable. Presumably you didn't start working for the company until after it was 'legally formed' and you knew the terms of your employment; I don't see how that's relevant. A covenant not to compete doesn't rise or fall on your intention to use (or not use) proprietary information from your former employer.

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