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Sunday, November 21, 2004

Cases—Employee noncompete clauses—Continued employment is not consideration

Washington_flag An employee noncompete clause signed five years after employment started is unenforceable unless it is backed by "independent consideration," according to a new decision by the Washington Supreme Court.

In this case, the employer had its sales representative, an at-will employee who worked on commission, sign the agreement, but did not offer any increased salary, job protection, or anything else.  When the employer subsequently changed its commission schedule, the sales rep began looking around for other employment.  The employer fired him and wrote a letter to its competitor (whom the sales rep had contacted) stating that it intended to enforce the noncompete.

The court held that continued employment is not, itself, consideration for the a noncompete.signed after the employment relationship has begun.

Labriola v. Pollard Group, Inc., 2004 Wash. LEXIS 825 (Nov. 10, 2004)

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