Not Every Job Change Terminates Non Competes
Updated: Sep 14, 2020
When a project ended and caused a need for an employee to shift work, he went from doing billable client work to non-billable business development tasks. When he left the company taking several clients with him, the company sued alleging breach of a noncompete. The employee said his new non-billable work made the noncompete unenforceable because of a prior court decision. The judge disagreed. It said that the prior decision required showing a clear new employment contract where the original employment contract was abandoned.
WHY THIS IS IMPORTANT…The 1968 decision referred to has been consistently argued to terminate old noncompete agreements. Here, the court noted the employee was (1) neither promoted nor demoted (2) his job title and salary did not change, (3) he continued to work on projects in his area of expertise, The fact that his role changed was not enough to cause a termination of the non-compete . In other words, not every job change will cause a non-compete to automatically terminate