Non compete

[Haircolor]

i used to work for a salon and I had a non compete where I am not allowed to work within 3 miles radius
I quit my job and started my own business 2.95 miles away
I received a letter from previous employer threatening to sue they want money for damages and lawyer fees if I don't pay them 25k and move
I immediately responded that I will move immediately
I have never solicited any of their clients but some of them found me on social media or had my number and contacted me asking for an appointment having heard that I moved

Now that I have moved outside the 3 miles radius I don't understand why they still want to sue me

My lawyer says I should settle but I don't have that amount of money and I complied and moved out side of restricted area

What am I doing wrong ?

 

[quincy]

i used to work for a salon and I had a non compete where I am not allowed to work within 3 miles radius
I quit my job and started my own business 2.95 miles away
I received a letter from previous employer threatening to sue they want money for damages and lawyer fees if I don't pay them 25k and move
I immediately responded that I will move immediately
I have never solicited any of their clients but some of them found me on social media or had my number and contacted me asking for an appointment having heard that I moved

Now that I have moved outside the 3 miles radius I don't understand why they still want to sue me

My lawyer says I should settle but I don't have that amount of money and I complied and moved out side of restricted area

What am I doing wrong ?

State name: North Carolina (according to your other thread)

How long have you operated your own salon? What (other than the 3 mile restriction) were the conditions of the non-compete?

You apparently did not take seriously the non-compete agreement you signed when working for the other salon if you opened a salon in violation of the geographic limits. The salon can sue you for breach of contract/violating the terms of the non-compete and seek damages (profits/losses). These damages could be awarded against you in court and could include court costs and attorney fees.

If your lawyer reviewed the terms of the non-compete agreement and the terms as written are likely enforceable in court, and if your attorney advised that you should work to settle the dispute with the salon, this is probably what you should do. A payment plan could be something to consider.

If you have NOT had an attorney review the non-compete agreement yet, you should.

Good luck.

 

[Haircolor]

Only been in business 2 weeks and immediately arranged relocation upon receipt of threat
Not profitable yet
I was young when I signed the contract and honestly lost it
I couldn't ask for it because they would have fired me immediately because they would suspect I'm asking for it because I'm leaving
They told me verbally no radius just don't solicit
I had to get a place as soon as I quit because there is no duratio notice in the contract

 

[Haircolor]

Contract is clear can not work in any capacity for 1 year in the same business in that radius

 

[quincy]

Contract is clear can not work in any capacity for 1 year in the same business in that radius

If the contract is clear in the terms of the non-compete then you violated the terms of the non-compete by opening your salon within 3 miles of your previous employer's salon. Your former employer might also be looking at what you have published on social media and the clients that you may have lured from his salon to your salon.

North Carolina courts look to the reasonableness of the restrictions in non-compete agreements. The restrictions should be no greater than needed to protect legitimate business interests. It appears to me that the one year/3 mile restrictions in the non-compete agreement you signed appear reasonable (and, therefore, enforceable).

Because I don't know where the $25,000 figure is coming from that your former employer is demanding to settle the matter, I recommend you rely on the advice and direction of your attorney when it comes to deciding whether to settle or fight.

Good luck.

 

[Haircolor]

Agreed but

I'm not disagreeing that I was in the wrong
I take responsibility
The part I don't understand is how am I supposed to pay them ?
I have moved and have offered 2-3k to settle
They want 20k
I want to settle I want this over I am cooperating I just feel because they can afford fancy attourneys they can ask for as much money as they want and for me to prove I didn't cause 20k in damages it seems like I have to pay 20k in fees
It's like a catch 22

 

[Haircolor]

Options

So I can close shop and sit at home
I still don't know how I'm gonna pay them
I can stay in much new location outside the radius .. I don't think my cash flow will be positive for at least 6 months

 

[Zigner]

The part I don't understand is how am I supposed to pay them ?

I hate to be so brutally honest, but that really doesn't matter.

 

[Haircolor]

It does

At the end we all have a role and trying to be productive
I am trying to be reasonable and work it out
I am making it on my own we all make mistakes
U think moving for 2 weeks into a restricted area should mean I should never work again ?

 

[Haircolor]

So let's say it doesn't matter

So then what happens ?

 

[adjusterjack]

I suggest you pay them nothing and avoid any future contact with them.

The "threat" did what it was designed to do. You moved outside the radius.

They might not follow up with paying a lawyer for a lawsuit for that kind of money knowing that they might only get pennies from somebody who has made no money yet.

I think they are just trying to scare some money out of you.

Up to you.

 

[Zigner]

I suggest you pay them nothing and avoid any future contact with them.

The "threat" did what it was designed to do. You moved outside the radius.

They might not follow up with paying a lawyer for a lawsuit for that kind of money knowing that they might only get pennies from somebody who has made no money yet.

I think they are just trying to scare some money out of you.

Up to you.

Huh? The OP's ATTORNEY has advised her to settle. Are you REALLY going to suggest that the OP do the exact opposite of what the OP's ATTORNEY (who has full knowledge of the facts in the matter) has suggested? Really?

 

[quincy]

I'm not disagreeing that I was in the wrong
I take responsibility
The part I don't understand is how am I supposed to pay them ?
I have moved and have offered 2-3k to settle
They want 20k
I want to settle I want this over I am cooperating I just feel because they can afford fancy attourneys they can ask for as much money as they want and for me to prove I didn't cause 20k in damages it seems like I have to pay 20k in fees
It's like a catch 22

It is, unfortunately for you, less a matter of what you can afford to pay your former employer and more a matter of what your former employer can show that you owe him in the way of damages (profits/losses) for breaching the terms of your non-compete agreement.

If your employer can show $20,000 worth of damages to his business as a result of your violation of the non-compete, your employer can win a $20,000 judgment against you in court.

Although you might not be able to satisfy a judgment immediately, your former employer can make your life miserable - freeze bank accounts, attach assets, garnish future wages - until the amount awarded in damages is paid in full.

That said, I don't know if your former employer can convince a court that 2.95 miles (v. 3 miles) is a significant breach. I don't know if your former employer can support $25,000 in damages (especially if you were in business only 2 weeks). I don't know if your social media postings violated the terms of your contract ...

... but, if you consulted with an attorney in your area already and this attorney has read over the non-compete agreement and has advised you to settle with your former employer, no one on this forum is in a position to second guess this attorney's advice.