A non-compete agreement – also sometimes called a non-competition agreement – is a formal and legally binding agreement between two parties in which one or more of those parties agrees to not engage in activities that would create or enable competition with a particular business. The agreement can be between any two parties engaged in a business relationship together. Often this relationship is between an employer and their employee, but it can also be between two parties who initially develop a business together, or contractors from two separate businesses engaged in a mutually beneficial relationship,  ie, business partners.

Why Would Someone Want to Enter Into a Non-Compete Agreement?

A non-compete agreement between business partners can be mutually beneficial to all involved. It creates an environment of trust in which partners can interact without fear of exchanged information or best practices being used to create competition for the business in question in the future. For example, it prevents a founding member of a business from taking proprietary knowledge or expertise and creating a new competing business or going to a current competitor and sharing it with them to the original business’s detriment.

What Constitutes a Business Partner?

Business partners can be any two parties who have combined their knowledge, expertise, or resources to create or benefit a business together. For example, doctors who form a practice together, or lawyers who come together to create a single law firm. While the parties in question are often individual people, classification of a business partner can also extend to corporate entities, firms, trusts, or any other entity capable of entering into a legal contract.

What Should I Do if I Feel A Business Partner Has Breached a Non-Compete Agreement With My Business?

Whether or not a business partner breaches a non-compete agreement is subject to interpretation in the eyes of the law. For example, if someone leaves a shared medical practice to form their own, then advertises broadly to the same population as their previous practice, that may not necessarily constitute a breach of the non-compete agreement. If, on the other hand, someone leaves a shared medical practice and takes with them a list of patients for the purpose of coaxing them over to a new practice, this may be seen as an actionable violation. In any event, If you feel like a business partner has breached a non-compete agreement and created extraneous competition for you and your business, it never hurts to consult with a litigation lawyer and fully examine your options. Our law firm is committed to looking at all the relevant facts on the table and – if necessary – guiding you through the process of taking legal action against the offending party.