Non Compete Blocking a New Start Up Business
One reason a court may not enforce a non compete clause is if the employee has not been paid as agreed. Below is one example of a non compete dispute we were able to resolve favorably due to non payment of commissions.
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Non Compete Solution
When Mike, Jeff and Tim came to slnlaw, they were looking for a way out of their non compete. Though four years was almost certainly too long to be enforceable, under Massachusetts law a court can still enforce the agreement for whatever it considers a reasonable time period. At that time, before the Massachusetts Non Compete Act, one could expect an agreement to be enforced for anywhere from six months to two years. This was too big a risk for them in starting their own business.
The non payment of commissions and material job changes, however, provided a different avenue to help them reach their goals. Material changes in job duties have at times been found to invalidate a non compete. Failure to pay as agreed can also be a material breach of the employment agreement that excuses the employee's performance. Even if that were not the case, the substantial commissions owed to these individuals gave them a viable and significant claim under the wage and hour laws.
We filed a complaint on their behalf, seeking payment of the commissions and also a declaratory judgment that the non competes were not enforceable. The employer, in turn, filed a counterclaim seeking enforcement of the agreements.
After initial discovery in the case, we were able to resolve it in such a way that the clients received compensation and they were allowed to continue with their business plans.
The non payment of commissions and material job changes, however, provided a different avenue to help them reach their goals. Material changes in job duties have at times been found to invalidate a non compete. Failure to pay as agreed can also be a material breach of the employment agreement that excuses the employee's performance. Even if that were not the case, the substantial commissions owed to these individuals gave them a viable and significant claim under the wage and hour laws.
We filed a complaint on their behalf, seeking payment of the commissions and also a declaratory judgment that the non competes were not enforceable. The employer, in turn, filed a counterclaim seeking enforcement of the agreements.
After initial discovery in the case, we were able to resolve it in such a way that the clients received compensation and they were allowed to continue with their business plans.
Postscript
The business started by Mike, Jeff and Tim is still operating and growing after more than seven years. They have taken many of the lessons learned from their prior employment experience to ensure that their policies are both legally compliant and fair to their employees and contractors. They continue to engage with us for proactive legal advice as their business grows.
The company they left revised its commission policy after the lawsuit to bring it into compliance. This brought a benefit to all of the other sales representatives still at the company.
The company they left revised its commission policy after the lawsuit to bring it into compliance. This brought a benefit to all of the other sales representatives still at the company.
How Our Non Compete Lawyers Can Help
We have years of experience representing people in non compete lawsuits in Massachusetts state and federal courts, as well as responding to cease and desist letters, and we would be happy to help. You can use the button below to schedule a call back from a member of our team, or give us a call at 781-784-2322.