This seemed like the most appropriate thread to post this. Not where I work, but I worked in twin cities area as a CPA and know people at this firm and others like it: http://www.startribune.com/former-partner-in-minneapolis-accounting-firm-loses-millions-in-noncompete-dispute/487546901/
Retired/bought out CPA firm partner violated non-compete and loses his $90k/month in retirement. I think there is some prestige involved with a job like this that make it hard to step away. The small firm I worked at had a couple partners bought when they turned 60 while I was there. One billed more hours in the year after buyout than the prior year.
Non-compete agreements are funny things. I knew a fellow (now deceased) who operated a tourist destination type store in Las Vegas, NV where he manufactured and sold widgets. To expand the business, he took on what was supposed to be a silent partner, but the partner was doing some things with the store my buddy didn't approve of. Eventually my buddy was effectively forced out, with only a small fraction of the business and the inventory, *and* the partner had the business and service mark rights to my buddy's name. So my buddy was a defeated shell of a man at that time. I couldn't stand seeing him that way, but in his mind he was in a bind because of the agreement he'd signed. Because of a bad partnership decision, he was losing control of a business he'd built from the ground up and that employed many people who over the years had become his friends.
"Did the contract have a non-compete clause?" I asked him. We were hanging out in a restaurant, and I'd brought along my parents and a girlfriend. Oddly, despite his years of entrepreneurial experience, my buddy hadn't run across the non-compete concept and didn't know what it was. My dad and I explained that it limited his business options in the same line of work, within a specific time frame and within a specific distance.
"You could open up John Doe's* flower shop next door," I said, "and nobody would care because people who come to town looking for widgets aren't the same customer base. Or, maybe you could open up a widget shop in a different county or five years down the line. In the meantime, the non-compete clause is supposed to give the other guy a chance to build up his business without interference from the former owner."
I suggested that, since his former partner had been such a dick, it would be awesome if he opened up the same kind of business he had before, only bigger, with a different name obviously, right across the street from the first one. But only if he didn't have a non-compete agreement.
"You've taken out a business license before. You've leased real estate. You've got the people, some inventory, and the contacts. Also, I'm reasonably sure that there is not a piano tied to your ass." A light came into my buddy's eyes and he sat up straighter. By the time we all left the restaurant, he'd resolved to check the contract and then fight back.
My father and I continued helping my buddy refine his battle plan while my mom daydreamed and my girlfriend enjoyed a strongly mixed beverage. (The ladies did not converse. Having met recently, they cordially hated each other. It's ironic because both are women of extreme refinement, intelligence, and taste.)
"Call the new store 'Widget Overlord of Las Vegas'," I said. "Technically you'll still be naming it after yourself... what? You've been a big name in widgets here for years. If someone asks: 'who is the widget overlord of Las Vegas', what name comes to mind? Someone else's? No. That's you. So name your new store 'Widget Overlord of Las Vegas' and get around the fact they own the rights to your own name. Henry Ford learned to live with it. So can you. You sold your name, not your balls."
It turned out that there was indeed no non-compete clause in the contract because both sides decided to cheap out and write it themselves, but neither had the demonic experience or legal training (possibly the same thing) to foresee the need for such an aspect of the agreement.
And so it happened that the Widget Overlord of Las Vegas opened a competing shop, stole back most of his former customers, and lived more or less happily the rest of his days. His former partner's business became a laughingstock and then collapsed. I wish I could say I got a free widget out of the deal but it didn't occur to me to ask. Looking back, I probably should have.
* not his real name