Non Compete Agreements, The company recently filed for bankruptcy
Posted on : 09-02-2009 | By : Legal Information | In : Bankruptcy & Debt, Employee Rights, Non compete agreements, Other Legal Topics
Tags: Bankruptcy Attorney, Non Compete, Non Compete Attorney
1
I was working at a company that had me sign a non-compete/contract agreement that would last a year if I decided to ever leave the company. The company recently filed for bankruptcy. The company was turned over to a receiver and the receiver brokered a deal to sell the company. The group that bought the company also bought the non-compete agreements/contracts
Is my non-compete still active or did it become null and void when the company filed for bankruptcy?
Hi,
I am an attorney licensed in California, thus, if you are located in a state other than California, I would strongly urge you to contact an attorney admitted to practice law in that state.
Of general note is the strong disfavor of non-compete agreements. In California, a recent Supreme Court case basically prohibited such agreements and, to the extent they exist, voided them or otherwise made such agreements unenforceable. There are limited exceptions, but it would seem from the facts you have supplied, that those exceptions do not apply to this case.
That said, if the business did purchase all employee agreements, and those agreements have a “successor/assignment” provision, then assuming that your state allows non-compete agreements, the new business would have the right to enforce such clause against its employees.
Again, I strongly urge you to seek legal representation in your state.
Good luck!
Abe Salen
SALEN LAW
abe@salenlaw.com