If you think you’d be better off leaving your job to start your own company that does the same thing as your employer, you’d better check the terms of your employment contract first. A swimming coach based in New Jersey, John Alaimo, worked for NYS Aquatics Inc. of Goshen, which has run the “New York Sharks” swim team since 2003. Although Alaimo renewed his contract with NYSA in the fall of 2019, less than a year later, in the summer of 2020, he started his own swimming company that likewise had a shark-themed name: Shark Swimming, LLC.
NYSA responded by suing Alaimo and two other swim coaches for breach of contract, citing both non-compete and non-solicitation clauses in their employment contracts.
A non-compete agreement states you cannot work for a competitor of your employer, usually within a certain geographic distance and a certain timeframe after your employment with them has ended. A non-solicitation agreement states you cannot solicit clients, vendors, or other employees of your employer to do business with your new employer. It’s also common to have a time limit on that requirement.
It’s unclear whether Alaimo’s non-compete and/or non-solicitation agreements were limited by time, but it doesn’t matter because Alaimo was still under contract with NYSA at the time that he founded his competing company. Continue reading ›