Non compete clause question

[babybydar]

I have a question that I am hoping you can help me with. There is a DS food company that has in their agreement that for a period of one year after the agreement is termininated, an ex-rep will not own or operate a DS food business in a geographic location within 20 miles from their business that they just terminated from.

Can this be enforced? How can this company keep you from operating a DS business that is not in direct competition from the company you just came from? For instance, what if these companies offers only a couple of items that are similar but not the same but yet so much of what they sell are different? How would that be "hurting" the company you just came from? What if you left the first company and did not solicit the second company's customers that you had?

If a customer is loyal to a brand, they will find a way to get it. I highly doubt that a customer that is purchasing products from a DS business would stop buying their product just because their rep left the company and went to a similar one and started buying from them. I am sure one would understand both sides of the story, but is this really realistic? To ban you from all food related DS businesses? Seems extreme.

Any thoughts on this? How many DS companies actually have non compete clauses?

[ccarroll]

I don't find it extreme if you think about it. Would you want your reps taking thier customers with them to another company? I don't 100% agree that people are brand loyal on food items. If you go to a similar company that sells similar items and take your customers with you, your former company would be the one losing the sales. not you as the rep.

Avon has non compete clauses. How can you be brand loyal to Avon if you are selling MK or Beauti Control as well? How would you recommend a particular brand to your customer if you were ablwe to sell any or all makeup brands.

Personally, I don't have a probelm with it. But that is me. many many companies in corporate america have no compete clauses. It is realistic in business.

Chris

[yministry101]

I think it is good because it does keep brand awareness which is very important in building a business. They have it because sometimes people join a company to learn how everything is done and than break off to do it for themselves or sell new ideas that are coming out to other companies. It's very sad. I can tell you recently I was offered a show that was far from me so I emailed it to another person who I thought was still a rep from my company and they weren't they said nothing that they weren't until after the show.

[jfslenes]

First, as the headline says. No one here can offer valid nor good legal advice, unless licensed/educated to do so.

But, it is likely that a narrowly defined well written non compete is valid. Yours is for 1 year, areasonable time frame. 5 or 10 years is not usually reasonable. Within 20 miles is reasonable, unlimited would likely invalidate the non compete.

Be creative. Maybe seek legal counsel although expensive, it may save the day. Could you put the new venture in a corporate name? You can do an online corp inexpensively. In your other half's name, in an adult child's name. Get a UPS mail box in a town 21 miles away and have them forward the mail to you.

Search the net for others who've dropped that company and challenged or broken the non compete. There may be more than one way to skin that cat (sorry if that offends the PETA nuts).

If all else fails, work another opp for a year then hit the road a runnin! Good Luck.