I currently work for a company that is up for sale, when will my non-compete end?
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I currently work for a company that is up for sale, when will my non-compete end?
The new owner is due to purchase the assets of the company on the 21st of this month. I have a non-compete agreement that expires about 7 weeks later. When dors the agreement expire – on the date of the sale and the new owner takes over the date of expiration listed in the agreement? The business name (corporation) is not being sold (it’s a service based business) and the new owner will be operating as his corporation already in place.
Asked on December 5, 2012 under Employment Labor Law, Illinois
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
If you are terminated from your current employment, even if immediately and seamlessly hired by the new employer, then the non-competition agreement would terminate UNLESS the non-competition agreement is specifically assigned (basically, trasferred) to the new employer--contracts and their obligations may be assigned or transferred unless the contract, by its very terms, states that it may not be.
If you are continuing to work for the same business entity (e.g. the same LLC or corporation), it would continue. If I understood your question correctly, though, this is not what is happening: the new owner will operate under a different, already existing business structure.
However, given that, from what you write, it's only an extra seven weeks until the agreement expires anyway, if you have the slightest hesitation or uncertainty about whether your employment is continuing to the same corporation or LLC, or whether the non-competition agreement has been assigned to (also called assumed by) the new owner, you would be well-advised to treat it as still in force and wait the extra seven weeks.
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