Question
For over five years, Rick was the CEO of JB Guitars Inc., a corporation operating a chain of retail guitar stores. When he first started
For over five years, Rick was the CEO of JB Guitars Inc., a corporation operating a chain of retail guitar stores. When he first started working at JB Guitars, Rick verbally agreed not to carry on a competing business for two years after he ended his employment with the corporation. This was standard for all beginning employees. He had gained tremendous practical experience and decided to start his own business selling guitars. However, to keep him from leaving, JB Guitars promoted Rick to CEO and had him sign a new agreement for his new position. During this time as CEO, JB Guitars considered a lot of Guitar related business to expand into. They determined the ideas were worth pursuing even though the timing for pursuing these ideas wasn't quite right yet, however, they hoped they would be soon. To avoid breaching his contract, Rick incorporated a corporation named Generation X Guitars Inc. prior to becoming CEO to carry on business ideas he had before he joined JB Guitars. JB Guitars claims that this corporation is just a way of getting around the non-competition agreement and has sued for a court order prohibiting Generation X Guitars from carrying on a business competing with JB Guitars. Will JB Guitars be successful?
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