QUESTION
Are their loopholes in NDA's for "Non- Circumvention"?
Asked on Apr 06th, 2021 on Breach of Contract - Texas
More details to this question:
I gave notice to a company in the Lead Generation space this week to restart my previous company that I owned which offered Lead Generation. The way the NDA reads : For 2 the next 32 years I cannot communicate with or provide a service to a competitor. This is a large company, mine was/is very small. Do I count as a competitor? This would be my only source of income. I have not will not have any conversations with this companies clients, I just want to restart my business and approach NEW customers that I can offer my service to. Any advice?
1 ANSWER
Assuming that the word "competitor" is not defined in the contract, I think your business would be a competitor. However, if the provision is really a 32 year ban on competition, there is almost no chance that a court would enforce it. Even if that was a typo, and the bar is only for 2 or 3 years, there is still a good chance that a court would find this provision overbroad and unenforceable, depending on the particular facts of your situation and your industry (just for one example, the clause is much more likely to be enforced it it was entered into as part of a sale of your business, or the assets of your business, to your former employer, than if it was simply part of an employment agreement). The problem is that you may not have the resources to fight your large former employer. If you can afford it, I think you'd be wise to hire a Texas atttorney to review the actual contract and advise you.
Answered on Apr 06th, 2021 at 1:00 PM