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Ask a Lawyer -- Contract Law
Contract Law Question 5
Question: Hello I am a DJ here in new york There is an annual music conf that happens every year in different cities of the U.S. on 2003 i signed a contract to dj for them and i did. On the contract there was a clause that said i would not compete or take part in any event that is in direct or indirect conflict with this conference now or ever. now, in 2006...i this conf is taking place in new york....but i am involved in another conference in Puerto Rico which is in competition with the conf in new york. Since i am involved in the PR conf. The NY promoters are threatening to sue me with the contract i signed back in 2003...can they do this? and what should i do?
Response: To be enforceable, the courts require that a noncompete agreement be limited geographically and by time duration. The limitations should bear some relation to the business needs of the employer or other party seeking protection under the non-compete agreement.
If I understand your question correctly, the noncompete agreement you signed in 2003 purported to bar you from competing with the annual music conference forever (i.e., it did not have a time limitation). Also, as they are attempting to bar you from doing DJ work in Puerto Rico, I suspect the 2003 contract also lacked a limited upon the geographic boundaries of the noncompete. In my opinion, such a noncompete contract is completely unenforceable. In the case of EarthWeb, Inc. v. Schlack, 71 F. Supp. 2d 299 (S.D.N.Y. 1999), a New York court refused to enforce a noncompete contract in the tech industry that lasted for 1 year after employment ceased. Article discussing case.
What do you do about it? I suspect these people are just blowing smoke about suing you as any competent corporate law attorney should realize that a noncompete lacking tightly drawn time and geographic limits is unenforceable. That said, there is always the risk the other party sues no matter how weak their position. In such a case, you could incur attorney fees in order to be vindicated in court. The decision is a judgment call best made in consultation with a local attorney.
Submitted: 11-3-2005; Jay, NY
Response: 11-3-2005; JJR
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