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Competing With Non-Compete Clauses


It’s a weird thing when you start studying the law.  Once your friends and family find out, they seem to come to you for every single law-related problem that comes up in their lives.

I suppose it’s true for every field of study or vocation.  Doctors probably have their cousins asking them to look at moles and pus-filled gashes.  Astrology professors probably have their aunts pestering them to find Orion’s Belt.  Taxi drivers probably can’t get their siblings to stop using them as a substitute for Google Maps.  The list goes on and on.  And the best part about all of this is that all the people who ask you these questions don’t care whether their question is within your field of specialty.  Resulting in situations like this:

“Hey Phil, what street do I take to get to the Eifel Tower?”

“I don’t know, my taxi only operates in New York.”

Okay, so maybe it’s not as drastic as that, but you get my point.

Anyway, regardless of the absurdity or irrelevance of the question, you always end up answering it to the best of your ability because, hey, what can you do?  They’re your friends and family and you like them (for the most part), which brings me to the point of today’s post.

I was talking to a friend the other day.  Let’s call him Norman because I don’t him to get pissed off at me using his suffering for my work.  Norman is a really nice honest guy.  He’s the type of person to go through his whole life never trying to cause a scene, which is good in some ways, but bad in a lot of others because maintaining that kind of lifestyle often leads to his inability to defend himself.

handshake with fingers crossed behind backAnyway, about a couple years ago Norman opened up a small convenience store.  His store was located within a mini-mall in his hometown.  It was a good fit for him because on top of being really nice, Norman is also really laid back and doesn’t like doing strenuous and stressful work.  Before renting out his location, Norman was able to secure the right to be the only purveyor and seller of food in the mini-mall.  The agreement was promised in Norman’s contract with the mini-malls owner.

But last month, Norman neighbor, a Laundromat, put out a soda vending machine in front of his store.  Norman saw this as a violation of the non-compete clause he had in his contract, but when he went to the mini-mall’s owner to tell his neighbor to take the soda machine down, the owner refused.  He claimed that soda is a drink and therefore didn’t count as a type of food so it was perfectly in line with Norman’s contract.  Norman then came to me to see what his chances were to get the soda machine put away.

This situation happens a lot.  Just taking a look at the number of unfair competition cases LegalMatch gets every year is good evidence of the popularity of these types of disputes.  My advice to Norman was the same that anyone knowledgeable in the law would give: it depends.

Basically in most jurisdictions, for non compete clauses to be invalid they have to be overly broad as to be considered unreasonable.  In Norman’s situation, it would seem like his non-compete clause was pretty clear since it outlined a specific limitation that could be reasonably followed (that he’d be the only food store).  And that in my opinion I’d think that he’d have a fairly easy time convincing a judge that drinks can be considered food because it’s something that’s consumed.

But like everything in the law, nothing can be certain.  Because even when all the cards seemed stacked in one direction, a good lawyer can easily make them fall in the other.

Ken LaMance


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