Help! I signed a non-compete when I first got into real estate. The company I work for is a bit specialized in that we only sell condo conversions investments. Because the company is specialized, does that mean I can't work for another similar company? A cousin of mine is going to open the a real estate brokerage that does the same thing and I'd much rather work for them. Is this legal?

Hello Joanna:

A non-compete agreement that ends a career is NOT enforcable. It is reasonable that one is asked not to compete for a length of time, to insure that one's clients remain at home. However, it's not reasonable to require one to give up one's profession, and it's not legal either.

If your non-compete agreement is open ended, then, in my view, you may disregard it, and go to work for your cousin. I would, however, run it by an attorney.

excon

A contract is a contract. If you breech it you could be sued for breeching it. Most non-compete clauses are designed to prevent an employee from stealing customers so there is usually a time limit. If the market is as specialized as you say a non-comete clause is reasonable.

As excon pointed, a non-compete can't prevent you from earning a living. But there is leeway there. If you are a licensed real estate broker you can sell any type of real estate so preventing you from a specific market might not be onerous.

Bottomline, you should contact an attorney before you take any job that could be considered competing.

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Originally Posted by Joanna111

Help! I signed a non-compete when I first got into real estate. The company I work for is a bit specialized in that we only sell condo conversions investments. Because the company is specialized, does that mean I can't work for another similar company? A cousin of mine is going to open the a real estate brokerage that does the same thing and I'd much rather work for them. Is this legal?

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Have a CONTRACT attorney review the document you signed NOT a real estate attorney.

Real estate agents are independent contractors by most state licensing laws so that may be your "out" of the non-compete agreement.

Joanna -

My experience for what it's worth. I work for a small company that also specializes in a niche market. Non-competes are very difficult to enforce unless they are very well written. I have seen non-competes fall apart with the smallest of abiguity in language. Verbiage like "and/or" can defang any agreement. If it does not specify a duration - it would be nearly impossible to enforce without parameters.

What's more, if you signed the non-compete AFTER you started working for the company -- most states require that you provide equitable compensation (cash, stock, etc.) in exchange. If you were asked to sign after you were hired and not compensated - it would be another strike against your employer.

As many have mentioned here - it's best to consult an attorney. If you're in NC -- I can give you the name of a firm that got a non-compete suit dismissed.