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Judge determines man violated non-compete agreements

According to a judge, one of the owners of the large chain of gyms and workout facilities, Work Out World (WOW), has violated non-compete agreements with the shareholders and other owners. A co-owner and the widow of one of the owners filed the compliant against the man because he opened competing workout facilities in violation of the agreement. Non-compete agreements stated that no partners or owners can open a gym or competing facility within 50 miles of a WOW gym.

The WOW chain of gym includes 14 facilities that span across New England. The non-compete agreement in question was signed in 2004 and one of the owners opened the competing gym in 2011. Business owners in New Mexico will note that the judge ruled that he did actually violate the terms of the agreement and was ordered to pay $3 million for damages incurred.

The agreement included prohibiting the defendant from opening facilities within 50 miles of a WOW gym, yet he opened and operated a chain of gyms with several locations within the prohibited zone. He also operated these facilities using the Work Out World name. His partner in this effort was also named as a defendant in this case.

New Mexico business owners may not understand the value of a non-compete agreement, but this case is a perfect example of why these legally binding agreements are necessary. Non-compete agreements are designed to protect businesses, but they should be carefully drafted in order to protect the interests of the company. When there is a violation of a non-compete agreement, it can result in legal repercussions or even damages awarded.

Source: Boston Business Journal, "Judge rules in favor of WOW gym owners in noncompete case, orders defendants to pay $3M", Mary Moore, Aug. 13, 2014

Source: Boston Business Journal, "Judge rules in favor of WOW gym owners in noncompete case, orders defendants to pay $3M", Mary Moore, Aug. 13, 2014

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