Is a non-compete clause enforceable if the original owner sold the company and there is now a new owner/name?
Technically, yes it is still in force. Non-compete agreements are generally enforceable in the case of a statutory merger or stock sale. Indeed, in the case of a statutory merger, the new entity or employer is the successor to the rights and liabilities of the original employer, and notwithstanding the law of assignments, the non-compete agreement remains in full force and effect after the merger, or sale. That said, the non-compete may be unenforceable after 5 years. Non-competes must be based upon the former emplyee having confidential information (such as margins, techniques, or customer lists), that would give the former employee an unfair advantage in competing with the former employer. If that is no longer the case, which would probably be the case after such a long time, the contract is not enforcable.
The non-compete agreement was between “xyz Inc.” and your husband. If the company is sold and renamed, no new agreement done with your husband, He must be home free. Also, 5 years? Good lord, not even in high tech a non-compete is that long, a reasonable non-compete goes for about a year, 2 at the top. Go to http://www.madufflaw.com/noncompete/ and find more about it, also check with a lawyer.
