BEAT THAT NONCOMPETE – FIRST BREACH DEFENSE
Many employees come to our firm wanting our analysis of their noncompete agreement with the question, “is this a valid restriction and, if so, how can I beat it?”
One of the most common defenses we encounter is called the “First Breach Defense.” A noncompete agreement is nothing more than a contract. Typically, that contract states that in return for being paid a salary, commission, bonuses, etc., the employee agrees not to compete with the employer after he/she leaves the employment relationship. If the employer failed to live up to its end of the contract by failing to pay commissions, etc., (in other words…breached their obligations under the contract) then the employee cannot be held to the noncompete restrictions.
My take: Employees should closely analyze their relationship with their employer and if the employer has failed to live up to their contractual obligations….they might just have a good defense to an otherwise valid noncompete agreement.