Sales and Service Non Compete and Changes in Pay
Non Compete and Changes in Pay: a Case Study
David and John, highly skilled sales and service technicians for a printer company, found themselves in a difficult predicament when their employer underwent an acquisition and management changes. The company implemented substantial alterations to their compensation and employment terms, which placed severe financial strain on David and John. Moreover, the new management style created a strained and unpleasant work environment.
Both David and John were bound by non-compete agreements, yet they didn't possess access to any of the company's trade secrets. Notably, the key clients they served had been brought to the company through their own efforts, establishing pre-existing relationships that predated their employment. The drastic compensation adjustments made it financially impractical for them to continue working under these conditions. Consequently, David decided to resign, and shortly after submitting his notice, the employer discovered that both David and John were contemplating launching their own business. In response, the employer terminated John's employment and swiftly initiated legal action, including a motion for a preliminary injunction, to prevent David and John from pursuing their entrepreneurial aspirations. Solution: Recognizing the urgency of the situation, we collaborated closely with David and John to swiftly gather all relevant information related to their employment and non-compete agreements. Our comprehensive assessment concluded that they had no access to the employer's trade secrets or confidential information. Furthermore, we deemed the employer's claim to goodwill as weak because the significant clients in question had pre-existing relationships with David before his employment with the company. Lastly, we believed that the substantial compensation and employment term changes resulting from the business sale could potentially void the non-compete agreements. We presented these arguments during the preliminary injunction hearing, advocating vigorously on behalf of David and John. Following the hearing, both parties engaged in mediation, eventually reaching a settlement. This favorable resolution allowed David and John to receive compensation and proceed with their new business venture. Postscript: David and John's entrepreneurial journey continued successfully, and their business, established six years ago, continues to thrive. They enjoy the freedom to operate their business and maintain customer relationships as they see fit, pursuing their unique business vision. |
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