Blog: Pay Attention to Noncompete Agreements
It is my understanding that a non-compete agreement must be a separate contract. I recently sold accounts to another company, and they included a paragraph that I agree not to compete for a period of five years. I did not sell my company, but merely accounts. This is all I have been doing for 40 years, and I cannot sit idle.
Furthermore, the sales/purchase was not signed in front of a notary, yet they had a notary sign it as though it was. Is there some recourse here?
Yes, there is some recourse. Stand in front of a sheet rock wall and bang your head until you put a hole in the wall or a hole in your head. I won’t ask why you haven’t confronted your attorney who represented you in this transaction because I am guessing you didn’t have one. You should have called me before you agreed to sell.
If you only sold accounts — and not your company — then obviously you didn’t intend to go out of the alarm business. What you should have agreed to is that you won’t compete with your buyer with the accounts you sold, but that’s it.
Restrictive covenants do not have to be in separate agreements; they are customarily included in agreements dealing with sale of businesses or employment. State laws vary, some being more constrained in enforcement than others, but all states require that the restriction be fair and necessary to protect the interests of the buyer or employer. It’s not likely that you can be kept out of the alarm business just because you sold your accounts. I’d have to have a lot more information —and a lot more money for a retainer — to give you a complete response to your inquiry.
By the way, the notary isn’t necessary.
Security Is Our Business, Too
For professionals who recommend, buy and install all types of electronic security equipment, a free subscription to Security Sales & Integration is like having a consultant on call. You’ll find an ideal balance of technology and business coverage, with installation tips and techniques for products and updates on how to add sales to your bottom line.
A free subscription to the #1 resource for the residential and commercial security industry will prove to be invaluable. Subscribe today!
Recommended For You
Cloud security can present a paradox: companies love the flexibility and versatility of cloud security management, but are unsure if the cloud itself is secure enough to house their vitally important systems.
From processing power to lens selection to proper positioning, here are 13 tips to help shed light on proper installation of cameras in low-light conditions.