[Amazing Fabrics] Amazing Fabrics, owned by Peri, has provided top-quality draperies, tablecloths and other linens to many of Chicago's high-end hotels for decades. Peri has an employment contract with his top designer, Calvin, which states that, if Calvin leaves Amazing Fabrics, he is prohibited from working for any competitor and that the clause remains effective even if the business is sold to new owners. Peri decides to sell his business to Lisette and retire. The contract for the sale of the business includes a clause that Peri shall not open a business that competes with Amazing Fabrics anywhere in the Chicago metropolitan area for two years. A year after signing the contract, Peri realizes he is bored in his retirement and opens Fine Fabrics, which provides tablecloths and other linens to Chicago area restaurants and hotels. Peri calls Calvin and persuades him to leave Amazing Fabrics and work for Peri. Many of Lisette's customers prefer to work with Calvin and move their business to Peri's new company. Lisette wants to sue both Peri and Calvin for breach of contract.
-Assuming covenants not to compete in employment contracts are legal in their state, would Lisette likely be able to enforce the contract against Calvin?
A) Yes, because Calvin is working for a competitor.
B) Yes, because Calvin is working for a competitor and his employment contract specifically states that it remains in effect if the business is sold to a new owner.
C) Yes, because Calvin is working for a competitor, his employment contract specifically states that it remains in effect if the business is sold to a new owner, and the covenant not to compete is reasonable.
D) Yes, because the covenant not to compete protects a legitimate business interest.
E) No, because the covenant not to compete does not contain a period of time and geographic area that are reasonable.
Correct Answer:
Verified
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