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What to do if a business partner violates their noncompete?

On Behalf of | Jul 3, 2024 | business law

If a business partner violates their noncompete agreement, it’s necessary to act promptly. You must follow a strategic approach to protect your business interests. 

Review the non-compete agreement

The first step is to review the non-compete agreement. Ensure that the agreement is valid and enforceable under Connecticut law. 

The noncompete clause must be reasonable in terms of duration, geographic scope, and the scope of restricted activities. Courts scrutinize non-compete agreements to ensure they are fair.

Gather evidence

Collect evidence of the violation. This could include emails, business records, or witness statements. They must show that your business partner is engaging in activities that breach the noncompete agreement. Documentation can support your claim and prove the breach.

Send a cease and desist letter

Before taking legal action, consider sending a cease and desist letter to the violating partner. This letter should clearly outline the terms of the noncompete agreement. 

Plus, it should state the nature of the violation and the potential legal consequences if they do not comply. Often, this step can resolve the issue without further legal action.

Seek mediation or arbitration

The state encourages alternative dispute resolution methods like mediation or arbitration to resolve conflicts. These methods can be less costly and time-consuming than court proceedings. 

File a lawsuit

If informal methods fail, you may need to file a lawsuit to initiate legal proceedings for breach of contract. Remedies can include injunctive relief (to prevent further violations), monetary damages, and possibly recovery of attorney’s fees. 

A court can issue an injunction to immediately stop the business partner from continuing the violating activities.

To address a noncompete violation effectively, it’s crucial to take decisive and well-documented actions. Each step serves to protect your business’s interests.