Person X works in startup A. Because reasons he also gets employed in a more established company B. He contributes to A only sporadically and is a full time employee in B. Both are software companies.

X and B have a run of the mill non-compete clause in their contract. The clause prohibits direct or indirect competition. A and X have no such clauses.

Initially A and B are doing completely separate things, but after X has started working in B, B starts switching it's focus into something that is somewhat similar to A, but that aims for a completely different market.

Would the contract prohibit X working in A?

What if later on A also starts moving closer to A and targeting similar markets?

1 Answer 1


If your contract says you will not work for a competitor, you cannot work for a competitor. While they were not competitors this was fine, once they became competitors then the person must resign from A in order to comply with their contract to B.

  • Thanks. As a follow up, let's assume that B does the same thing all along, but A MIGHT end up doing something that could be seen as competition in the future, but this is not the current case or even a plan, just a recognized possibility. Should X resign immediately, when A starts to have immediate plans of competing with them, or when A starts to actively do business in the same segment as B?
    – Seppo420
    Nov 10, 2016 at 12:08

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.