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Breach of NY Non-compete Agreement: Lost Profits and Disgorgement

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When a relationship with a former employee terminates, occasionally, that employee will continue to pursue the clients of the company. This action may be in violation of a New York non-compete agreement. What is the employer entitled to recover in these situations?

The father of NBA star Mario Chalmers may be about to find out. Ronnie Chalmers has been sued by his former business partner, David Sugarman. Sugarman accuses Chalmers of breaching his non-compete agreement. Sugarman alleges that Chalmers approached several NBA players following his termination. 

If this lawsuit were brought forth in New York, Sugarman could potentially be entitled to the following damages:

  • Lost profits that directly resulted from the breach of the non-compete agreement.
  • Lost profits are defined as net profits as opposed to gross profits.
  • If any of the alleged activity occurred while Chalmers was still employed by Sugarman’s company, Sugarman could potentially recover all of the profits that Chalmers gained during that period. This is known as disgorgement.

Disgorgement would only be available to the company if Chalmers had used the trade secrets of the company for his own benefit while still working for the company.

If you are involved in a breach of non-compete agreement in New York, it is vital that you contact a knowledgeable legal professional right away for guidance. Breach of non-compete matters are subject to time limitations. To ensure that you receive the maximum amount of damages for your claim, you must act quickly. Contact an experienced New York business litigation lawyer today for further guidance. Call our office at (888) 497-3410 for a free consultation.

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