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  1. #1
    Join Date
    Dec 2007
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    NC
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    2

    Default Broad Non-Compete In North Carolina

    I signed a non-compete agreement, as a condition of employment for a firm in NYC. At the time, I lived in NJ. However, I decided I wanted to live in NC, and I left NJ and my position early last year.

    A competitive company has contacted me to run a different division within their company, and I my customer base would be different. This company is located in NC.

    My non-compete states:
    "For a period of one year, I will not directly or indirectly, whether as owner, partner, shareholder, consultant, agent, employee, co-venturer or otherwise, engage, participate or invest in any business activity anywhere in the WORLD which develops or markets products or performs services which are competitive with the products or services of the Company."

    I have two questions.
    1. Will this agreement hold up in NC, if I go to work for a competitor but in a different division in a completely different role?

    2. Will the geographic area of "the WORLD" hold up in NC?

    Thanks for your help.

  2. #2
    Join Date
    Mar 2005
    Location
    Michigan
    Posts
    28,906

    Default Re: Broad Non-Compete In North Carolina

    Your non-compete from the new employer in North Carolina, or the old employer in New York/New Jersey? Is there a "choice of law" provision in the contract, dictating which state's laws apply to its interpretation?

  3. #3
    Join Date
    Dec 2007
    Location
    NC
    Posts
    2

    Default Re: Broad Non-Compete In North Carolina

    Sorry....The NC employer does not have a non compete. The non-compete is from my previous employer in NYC. There is no language in the agreement for "choice of law." Thanks!

  4. #4
    Join Date
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    Default Re: Broad Non-Compete In North Carolina

    I understand North Carolina to limit noncompetes to two years, and to require that the geographic restriction be reasonable. I don't have any facts to determine whether the geographic scope of the noncompete is reasonable - some types of work are international in nature - so all I can do is suggest that you discuss the specifics with a North Carolina lawyer. (There are also choice of law issues - if the clauses are not enforceable under New York law, even if consistent with North Carolina law and public policy, you should be able to assert New York law as a defense in any North Carolina litigation.)

    Note, though, that even if North Carolina would permit you to work, your employer could seek an injunction in New York, and if successful could have that injunction enforced through the North Carolina courts. New York will only enforce a noncompete if it is no broader than is necessary for the protection of legitimate employer interests, it does not impose an undue hardship on the employee, and it is not injurious to the public. That's also a fact-dependent analysis best made by a New York lawyer who knows the details of your work and can review the contract.

  5. #5
    Join Date
    Jun 2008
    Location
    Charlotte, North Carolina
    Posts
    7

    Default Re: Broad Non-Compete In North Carolina

    Actually, NC Law has a limit of 5 years on a non-compete. While the tests of a non-compete are more technical than the above posts have stated, they have the gist of it. For your situation, your contract was signed with a NY company while you were in NJ. It is very unlikely that NC law will apply though venue may be proper here depending on the contract.

  6. #6
    Join Date
    Mar 2005
    Location
    Michigan
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    28,906

    Default Re: Broad Non-Compete In North Carolina

    Just curious - are you stating that North Carolina follows "choice of law rules" when it enforces noncompetes, and doesn't apply a public policy analysis before enforcing noncompetes from other states? As you probably know, some states will not enforce a noncompete that is incompatible with their own laws, even if the noncompete was executed elsewhere or has a choice of law clause, save for when compelled to do so by "full faith and credit" - e.g., where the employer is seeking to enforce an out-of-state order enforcing the noncompete.

  7. #7

    Default Re: Broad Non-Compete In North Carolina

    Non compete clauses are not favored by the courts and this one sounds too broad. However, that would not prevent your old company from suing you. If the customer base and products are different, there will not be a problem. The next question is how are they to know?

  8. #8
    Join Date
    Mar 2005
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    Michigan
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    28,906

    Default Re: Broad Non-Compete In North Carolina

    Note that this is an old thread.

  9. #9

    Default Re: Broad Non-Compete In North Carolina

    I hate when that happens.

  10. #10
    Join Date
    Jun 2008
    Location
    Charlotte, North Carolina
    Posts
    7

    Default Re: Broad Non-Compete In North Carolina

    In my experience, choice of law principals have always applied. That being said, there are cases where clear choice of law principals have been ignored to obtain the desired result.

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