Estate Planning

Non Compete Agreements and Bankruptcy

By David M. Goldman

I was recently asked about violations of a Florida non-compete agreement and the effect of a personal bankruptcy filing. I found a case which seems to address this issue on point. The case law is that as long as the debtor does not prove that the contract damages are tortuous and that he debtor caused willful and malicious injury the claims are discharged under the bankruptcy code as any other claim is.

This issue was raised by a company who failed to present evidence in a ex-employee's bankruptcy case that was sufficient to show both that the conduct was tortious and that the acts were both willful and caused a malicious injury to the company.

It would seem to reason that an ex-employer who failed to raise these issues during the bankruptcy would also denied a claim against the ex-employee.

If you are a company who has a cause of action against an ex-employee or an ex-employee who has filed bankruptcy and involved in a suit over a non-compete or Florida non-solicitation issue you should contact a Florida employment Lawyer who deals with Florida Non-Compete law.

Full post as published by Florida Estate Planning Lawyer Blog on January 29, 2008 (boomark / email).