non-competition Business Agreement questions

[ktnguyen71]

Hi all,
I have been working with a company for about a month and I want to start a new business.

Let say a company X produces product A which is the combination of B and C. I am capable to produce C for the company. I found a new way to produce C cheaper for the company X. Eventually, I want the company to ship all the C production to me.

Here is the problems:
1) Potentially, my future employees can contact company X directly to produce C at a lower cost. How can I use the business agreement to prevent this from happening?
2) Can I have a business agreement with the company X that it can't hire my current or ex employees within a time frame (i.e. 3 years).

Your ideas are appreciated,
Kevin

[akula]

ok....this is a non compete issue

the test applied is in Nordenfelt

see explanation

The starting point is the leading case of Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co. Ltd. [1894] AC 535 (HL).

At page 565, Lord Macnaughten said: “All interference with individual liberty of action in trading, and all restraints of trade themselves, if there is nothing more, are contrary to public policy, and, therefore, void. That is the general rule. But, there are exceptions; restraints of trade and interference with individual liberty of action may be justified by the special circumstances of a particular case. It is a sufficient justification, and, indeed, it is the only justification, if the restriction is reasonable – reasonable, that is, in reference to the interests of the public; so framed and so guarded as to afford adequate protection to the party in whose interest it is imposed, whilst at the same time it is in no way injurious to the public.”

err..dude...I really don't think you need to worry about all this legal, non compete stuff...just start a business and get a customer...all this other stuff will resolve it self later

[dosrotties]

Noncompete only works to a certain extent. Everyone has the right to work and make a living.

[akula]

that's right..that's the point of nordenfelt

it explores the limit to which non competes are voidable

the case says "yes, you can have a noncompete, but this is what you can't put in it..."

[ktnguyen71]

Thank you very much for your responses.

I have been thinking through the process and had the similar idea that every one needs to work, to survive and to strive for better. Therefore it would be very hard to constraint one to get better.

Therefore, when I posted the question, I hope to get some ideas on how to minimize the employees' efforts to find the root of the employment source.

Any suggestion?

[dosrotties]

Will the employees know where you are getting the product. Can the factory place a different OEM name on the product or can you get a distributor agreement for your area. Hire guys from McDonalds and you'll be alright for a while, they will never have enough money to go off on there own.