Confidentiality agreement


Old 05-23-09, 10:39 AM
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Join Date: Nov 2005
Location: USA
Posts: 296
Confidentiality agreement

I am working for a father/son business and now am looking to move into starting my own business in the same profession. When i started i had to sign a form of confidentiality which basically said that for two years after leaving the company i could not work for any of their competition within a 50 mile radius. My business would be located 30 miles away. Does their document carry much legal defense or is it just a deterrent? I though being an born American citizen i had the right to work where ever in the country.
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Old 05-23-09, 10:51 AM
Gunguy45's Avatar
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Join Date: Dec 2007
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No lawyer..but is it a confidentiality agreement or a non-compete agreement....?

They may sort of overlap, but the non-compete normally prevents them training you and teaching how the business is run..then starting your own business and taking away their customers.

And yes...the forms are legal (if done properly) and if they went to court..they would probably win..which could include damages and forcing you to move or go out of business.
Old 05-23-09, 11:44 AM
Join Date: Mar 2005
Location: USA
Posts: 6,127
Confidentiality agreement

Have an attorney look over the agreement you signed to give you some options. The exact wording is very important.

Your wording including "the competition" could be a little loose. Since you were not in business when you signed it, you POSSIBLY could have not been the competition then, but that can be argued.

It all gets down to the details ofwhat you signed and they may have had a simple "off the shelf" agreement that is really not that tight for the location.

Are you on good terms with your ex-employer and can you compliment what they are doing or are you an "in the face" competitor. It is always better to have a friend instead of a established competitor. I say this because often a friendly so-called "competitor" can be an asset.

You can always rent a space outside of the 50 mile radius and change the legal location of your headquarters/office, but that could be a nuisance and an added cost.
Old 05-23-09, 03:48 PM
Join Date: Sep 2008
Location: Bottom of Pikes Peak
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Is there any way that the company you are currently working for would allow you to "franchise" into the new area? That way you can use their name, not necessarily compete, and you get their reputation right away (unless they have a poor reputation that you wouldn't want).
Old 05-23-09, 08:49 PM
Thread Starter
Join Date: Nov 2005
Location: USA
Posts: 296
sorry, it is a no-compete clause, its been a long time since i've seen it and it did have all the legal mombo jumbo with numbers as far as damages they would claim. Full page, front and back. I wouldn't be in their way type of competition, they we only work in the area i'm in maybe once a year.

they had an ex employee that stole a lot from them doing moonlighting, so that's where they got the no-compete from. Plus they've had I'd say 4 other guys quit and start their own too. i am still employed with them. I've been tossing around starting my own for probably a year. like any good business plan i need everything in order, once i commit to it, there's no turning back.

the idea of renting a spot had crossed my mind, in fact, now that i think of it i have relation outside the 50 mile line. There would be no reason for me to be at that address. Could i use their address without any problems?

Right now things are on edge between me and bosses. In good times i might have been able to get them to cut up the agreement, but in good times i wouldn't need them too .
Old 05-24-09, 04:51 AM
Join Date: Oct 2008
Location: New England
Posts: 10,022
Be careful what you do. A good friend went the lawyer route and was told there should be no problem. Well, the courts saw different and it cost my friend 250 big ones and he had to move 75+ miles away to earn enough the pay the judgment.

A no compete clause is intended to prevent exactly what you want to do, so don't be disappointed. If the situation were reversed, you would want the same protection.

Now, bad time to be giving up your day job, and bad timing to be starting a new business. Starting new is a lot harder than you might think. Even if they said "go for it" your chances of success are low. I'm not picking on you, those are just the facts. Before you quit your job, put all the numbers into a business plan and have your accountant and banker look it over.

I'm not suggestion no, I'm saying slow.

Old 05-24-09, 07:28 AM
Thread Starter
Join Date: Nov 2005
Location: USA
Posts: 296
eh, seems like a lot of work and head ache, I'll just suck it up and keep working there, I love doing the work i do. Like you said bud its just a terrible time to do anything right now. Thanks fellas.

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