Sold my HVAC company last year. Non-compete is 18 months. I'm basically a ghost in my own industry until then. But I keep hearing horror stories about sellers getting sued because they 'accidentally' violated the terms. What does staying fully compliant actually look like day to day? Not just the obvious stuff like not starting a competitor, but the little things nobody talks about.
Non-Compete
Staying fully compliant until your non-compete expires
First thing: don't answer calls from former clients. Even if they just want to say hi. Sounds paranoid but i've seen it used as evidence of solicitation. Let it go to voicemail and never call back.
What state are are you in? Non-compete enforceability varies wildly. Some states barely enforce them at all, others will nail you for a LinkedIn post that 'implies' you're still in the game.
I'm in Ohio. The buyer was pretty aggressive about the terms so I'm assuing they'll be watching.
Ohio is moderately enforce-able. You need to be careful with social media. Don't update your LinkedIn to anything that even smells like HVAC. Don't comment on industry posts. Don't congratulate former colleagues on work wins. It's stupid but a screenshot of you engaging with the industry can be twisted.
This thread is making me never want to sell my business lol. That said, I knew a guy who got sued because he forwarded a newsletter from his old industry to a friend. The buyer's lawyer argued it was 'maintaining industry relationships.' Cost him 40k to settle. Absolute nonsense.
The biggest thing people forget is the paper trail. If you have any email, text, or whatever where you even jokingl say 'I could do this better' about your old company, delete it. Or better yet, never write it. Discovery is a nightmare.
also, check your non-compete for a 'passive ownership' clause. Some allow you to own a small stake in a competitor as long as you're not active. If yours does, and you have a buddy starting an HVAC outfit, you might be able to invest. But read the exact language with a lawyer. Don't guess.
Appreciate the replies. The passive ownership idea is interesting. I'll dig out the contract. I have a lawyer on retainer for the next six six months anyway, might as well use him.
Use him now. Not in month five. Ask him specifically: 'Can I be a silent investor in a related business?', and 'Can I do consulting for a company in a completely different vertical?' Get it in writing that he advised you. CYA.