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  1. #1
    Join Date
    Mar 2017
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    Default Damages for a Non-Compete Contract Violation

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

    i used to work for a salon and I had a non compete where I am not allowed to work within 3 miles radius
    I quit my job and started my own business 2.95 miles away
    I received a letter from previous employer threatening to sue they want money for damages and lawyer fees if I don't pay them 25k and move
    I immediately responded that I will move immediately
    I have never solicited any of their clients but some of them found me on social media or had my number and contacted me asking for an appointment having heard that I moved

    Now that I have moved outside the 3 miles radius I don't understand why they still want to sue me

    My lawyer says I should settle but I don't have that amount of money and I complied and moved out side of restricted area

    What am I doing wrong ?

  2. #2
    Join Date
    Mar 2013
    Posts
    18,340

    Default Re: Non Compete

    They want money for what you DID not for what you are doing now.

    If they believe that you cut into their profits during the time since you left they could be entitled to those profits.

    Obviously you have the option of settling or ignoring them now and wait and see what happens.

    Think about this, though. How long has it been since you quit and opened your own business?

    How much money have you made in net profits since then? See line 31 of your Schedule C that you filed every year with the IRS.

    Another question. How is that 2.95 miles computed? Straight line or street route? A street route could be longer than a straight line.

    You might have a variety of defenses to a claim for $25,000.

    Then again, you might not.

    Your lawyer should be looking into all this for you as well as researching cases to see how your state courts feel about non-competes.

    Or is it that your lawyer says settle because you don't have the money to pay him either?

  3. #3
    Join Date
    Mar 2017
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    5

    Default Re: Damages for a Non-Compete Contract Violation

    I quit 2 weeks ago and have only been in business 2 weeks .. 2.95 straight line .. over 3.5 if driving on streets
    Total amount of clients that voluntarily followed me 15

    Legal fees are paid up front and not the issue it's the principle

    Not profitable yet !!

  4. #4
    Join Date
    Mar 2012
    Posts
    1,360

    Default Re: Damages for a Non-Compete Contract Violation

    Then you should put in the address of your old shop and new in maps.google.com, and then let it compute the distance, and send that to the old employer. When they see the distance in terms of what normal people have to do to get there, maybe they'll back off, and you'll get out cheap.

  5. #5
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    Mar 2013
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    Default Re: Damages for a Non-Compete Contract Violation

    Quote Quoting Haircolor
    View Post
    I quit 2 weeks ago and have only been in business 2 weeks .. 2.95 straight line .. over 3.5 if driving on streets
    Total amount of clients that voluntarily followed me 15

    Legal fees are paid up front and not the issue it's the principle

    Not profitable yet !!
    Then the "threat" did what it was designed to do, got you to move.

    Given that you are gone only two weeks it's incredibly unlikely that they would follow through with the expense of a lawsuit.

    Relax.

  6. #6
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    Mar 2017
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    5

    Default Re: Damages for a Non-Compete Contract Violation

    Quote Quoting adjusterjack
    View Post
    Then the "threat" did what it was designed to do, got you to move.

    Given that you are gone only two weeks it's incredibly unlikely that they would follow through with the expense of a lawsuit.

    Relax.
    If that was the case I wouldn't be on here
    I have moved and have offered to pay a small amount that I can afford in damages 2-4K plus let them keep whatever they owe me around 1500 in product commission

    They have not settled and want 20k and I don't know what to do now

  7. #7
    Join Date
    Oct 2016
    Posts
    4,301

    Default Re: Damages for a Non-Compete Contract Violation

    I would ignore them at this point. First since you didn't mention it in your original post I'm going to assume they haven't yet gotten a lawyer. Let them sue you. THey clearly aren't willing to settle so the worst that will happen is they take you to court.

    Courts don't like non-competes much to begin with and in NC they have some standards:
    A Valid Non-Compete Agreement must be:

    In writing
    Reasonable as to time and territory
    Made a part of the employment contract
    Based on valuable consideration
    Designed to protect a legitimate business interest of the employer

    And while this contract may well meet those standards if it is even close most courts will rule in the former employee's favor.

    But you have a lawyer and you should take his advice but it doesn't sound like they want to settle.

  8. #8
    Join Date
    Mar 2017
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    5

    Default Re: Damages for a Non-Compete Contract Violation

    The letter was sent from their lawyer
    With a copy of the potential lawsuit included with the letter ( ready to file)

    My thoughts were offer to settle with what I believe is reasonable
    If that doesn't work I've already moved I'm just going to let them sue me
    Is that stupid ? Since they are asking for way too much

  9. #9
    Join Date
    Oct 2016
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    4,301

    Default Re: Damages for a Non-Compete Contract Violation

    I don't think it is stupid at all. Considering the short time you were in violation of the agreement. The only other thing I can think of is to no longer accept the customers that followed you.

  10. #10
    Join Date
    Mar 2017
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    5

    Default Re: Damages for a Non-Compete Contract Violation

    The only people who followed me are my friends and family that only came to me at the previous salon because they know me from before

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