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Husband and wife contract / Non-compete v no contact
February 5, 2020
Husband and wife contract
            Husband and wife are both listed as subscribers on a Standard Residential All in One Security Agreement, but the husband was the only signer.  Wife asked us to remove husband from call list.  Wife is now asking for him to be removed from the account.  Wife is evasive (communicating via email) so I’m unclear about the real reason for the request (separated/getting a divorce). (The Agreement has 1+ year remaining.)
            Can we remove the husband from the call list and billing at the wife’s request and still hold him accountable to the agreement?
            What rights (account changes, etc.) and obligations (financial) does the wife have because she is listed as a subscriber but did not sign the agreement. 
            Do we need to get a new contract with wife as subscriber and signer or can we make the changes she requested? 
Thanks in advance,
            This is how this situation can be messy.  Try suing the wife on the contract.  You’ll find out she claims she didn’t sign it and has no liability.
            See what happens if there is a loss.  She will sue you claiming she is party to the contract or a beneficiary of the contract.  Depending on how dumb her lawyer is, she may claim she has rights under the contract and at the same time isn’t governed by the exculpatory clause and limitation of liability clause.  Or she may claim you have been negligent and she is entitled to make a claim against you in tort, not contract.
            The wife has not signed the contract.  She apparently is in possession of the premises.  You should get her to sign a new contract.  Let the husband know that you have terminated the old contract once the new one is signed.  Hopefully he will not contest canceling his contract.  
            There is no good answer here.  
Install a new system for the wife and keep both contracts going.  
Tell both of them you won’t make any changes until they get you a court order
            This wouldn’t have been any easier if both had signed the contract.  You would still be getting mixed messages.  I know lots of you out there have been confronted with this and handle it in various ways.
Non-compete v no contact
            What’s the significant difference between a Non-compete and a None-contact clause, if there is one? In a right-to-work state, wouldn’t a clause with a no contact with customers be an easier enforced provision than a non-compete? Especially for a lengthy term. 
            Personally, I don’t feel it’s my goal as a business owner to restrict the past employees ability to earn a living, regardless of reason for the separation. After all, they probably came from another company to work here. However, I don’t want them to have any contact with my customers now. 
            I’ve heard over the years that a non-compete can be difficult, if not impossible, to enforce past an 18 month time limit, but a none contact can be enforced for an almost indefinite time frame. In fact, I know of a friend in the business and his employer at the time, that was sued by a national company for breach of a non-contact after they “took” a customer from this national company and the settlement was around 100K. I believe the “meat” of the lawsuit was that the owner of the company had a none-contact with the national company due to prior employment and even though wasn’t directly related to the “takeover” he now had contact with the customer.
            The terminology I am familiar with is non-compete and non-solicitation.  They go hand in hand.  Don’t solicit and don’t accept the customer, no matter who initiated the contact.
            Right to work state is another issue, I think unrelated.  It pertains to union workers and non-union workers.  
            In most states restrictive covenants against soliciting customers and competing against the former employer will be enforced but only to the extent necessary to protect the employer’s business interest and not unduly prevent the employee from earning a living.  Notably, I believe California does not permit such provisions.  
            You, and every other employer, needs to use the Employment Agreement.  When you define the restriction, be reasonable.
            Another notable exception to the general rule regarding restrictive covenants is that a seller of accounts can be and is restricted from soliciting those customers, and the restriction can be lengthy in time and scope.  The reason is that the seller sold those accounts and should not then be permitted to steal them away.

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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301