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Court rules employee did not violate non-compete agreements

In a ruling that may interest business owners in New Mexico, a court ruled that an employee did not violate the terms of non-compete agreements with his former employer. The case stemmed from a man who joined a competitor 10 days after he left his employer, possibly in violation of non-compete agreements. The man was originally employed by a home healthcare provider as a patient advocate.

Upon being hired by this healthcare company, he signed a non-compete agreement. The terms stated that he was not allowed to work for a similar or competing company for the next two years if he left his employment. Eventually he was fired by the healthcare company for reasons that were unknown. After his termination, he was re-hired by this same business.

Further complicating the situation, the man was not required to sign a new non-compete agreement when he was rehired. Eventually, he left this healthcare provider and went to work for a similar company. His former employer then initiated a lawsuit against the man and his new employer, claiming that he violated that terms of the non-compete agreement. Eventually the court ruled that he was not in violation of the agreement because he was not required to sign a new agreement when he was rehired.

Non-compete agreements are designed to protect the best interests of the company, but employers should be careful about the terms of these agreements. In this case, the failure of the employer to have the man re-sign an agreement likely contributed to the negative outcome of their legal case. New Mexico businesses and employers will find it beneficial to understand non-compete agreements and how they can benefit from these legally binding terms.

Source: ibj.com, "Appeals court finds for employee in fight over non-compete pact", Jennifer Nelson, Aug. 29, 2014

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