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Hello. Hoping someone can give me a little advice.
I am employed as an administrative sales assistant - basically low level- for an IT company (I'll call company A). Two years ago, I signed a non-compete agreement with Company A and honestly wasn't thinking anything of it at the time. My mistake for not really reading it.
Flash forward to now. I have not been happy with my job for a while and just last week was approached by my previous employer (Company B), who I left 5 years ago and with whom I've been wanting to return to. I was offered the job as an admin assistant and I am excited to return. Company B is not even close to the same industry as Company A... opposite end of the spectrum. So, I'm not worried about the "compete" clause.
My problem is Company B is a customer of Company A and there is some wording in this non-compete that worries me. It says that "if he Employee's employment with the Company terminates for any reason, the Employee shall not, for a period of 1 year from the date of termination, be employed by or have any business dealings with any customer or client of the Company......". They have tons of customers in the general area where I live! It would be hard for me to find something outside of their customer base.
Company B does very, very, very little business with A so there is not even a threat that I can see. But, knowing what I know about Company A, they might enforce that part. Of course, the provisions of this agreement can be waived for a very large fee.
I also have a unique situation as even if I don't tell them now, my current manager will eventually find out where I am going to work. Probably sooner than later as she knows too much of my past, lives very close to me, and there is also a family connection. It's just not a good situation with her - a two-faced backstabber.
Anyway, I apologize for the length of this but had to explain some things. I really feel like a slave to this company because of this non-compete.
What are your thoughts on this being enforceable just based on the "customer" issue I explained above? Do I have reason to worry about that?
Would you suggest telling them where I'm going or would you just say it's not the same industry?
I need to give my notice this week so I'm hoping I do the right thing. Your thoughts are greatly appreciated.
The great majority of non-compete agreements are total BS.
State laws is what governs these agreements and in the majority of states for non-compete agreements to become enforceable you must have received compensation.
Upon exiting will they give you $50,000 to non-compete? Will they give you $1 to non-compete?
Upon signing the non-compete agreement did they give you a check for money?
If the answer to all these questions is no then tell them to bugger off and go pound sand.
A non-compete agreement is a contract and in a contract you must receive something.
Whether a non-compete agreement can be enforced is both fact and law specific. As mentioned above, the law will vary from state to state In some states, non-compete agreements are against the law. In other states, they are routinely enforced. The agreement itself may have a clause that specifies what state's law applies, and those clauses can be subject to disputes about whether they control what law applies.
Even in states where the non-compete agreements can be enforced, the typical method for enforcement is to obtain a temporary restraining order or longer term injunction. Before a court will enter such an injunction against you, the court will examine many factors that concern the facts of your specific agreement and employment situation. Factors courts look at for the agreement typically include the geographic and temporal limits of the non-compete's scope. The specificity with which "competition" is defined is another common factor examined. As for your specific employment, courts are trying to determine whether the non-compete agreement is limited to protecting the employer's investment in you or whether the employer is trying to gain an unfair advantage in the market place by keeping you unemployed by anyone else. Examples of unfair advantages include preventing you from using skills and relationships you developed before you came to the employer trying to enforce the non-compete. Courts will also be concerned about how enforcing the non-compete impacts the availability of your services generally. For example, courts are more reluctant to enforce non-competes when the individual being restrained offers unique or rare services upon which the local market depends. That's not likely you, but for folks like highly specialized physicians this comes up from time to time.
Finally, in many cases, even though an employer has the ability to enforce the non-compete, they choose not to or otherwise neglect to do it. But testing employers on this is a high risk for you.
All of what I have written is certainly not likely to give you much specific guidance except to show you better why you should consult a local lawyer who is experienced with non-compete agreements. The agreement can have a very detrimental impact on your ability to work and earn a living. On the other hand, it may be an agreement that causes little or no restriction on you in your particular case. Spend what will likely be 2-5 hundred dollars to get good advice from a knowledgeable attorney. It's money well spent when you need to know about how your non-compete is going to affect you.
And 3 years later, how is the lawsuit going by the former employer? You see, people say things like this, and don't realize that a lawsuit isn't a big deal for an employer to file against you, because many already have legal staff, and they have to justify their existence doing something. And lawsuits aren't over like on TV in 30 or 60 minutes.
I know of two people who left their company and got a lawsuit from their former employers claiming they stole clients. Each of these took 3-4 years until the case was over with, and it ended with both sides calling it off. The lawsuit for the former employees cost them huge sums of money and stress all those years.
What the better companies do, is ask if you signed a non-complete with your current or former employer, and HR will ask to see a copy of it. They review it and let you know if they see this as a problem. Because ethical companies want to avoid lawsuits. They aren't doing this to protect you, but they are doing this to protect their company. Because in this case, in the event of a lawsuit they are going to come after your new employer because they have much deeper pockets than you.
A friend of mine working in the same industry was indeed asked by HR if he had signed a non-compete and asked to see a copy of it to have it cleared by their own legal because proceeding with their application for the job. Which is what he did and they got back and said they didn't see a problem.
Of course, for real legal advice you should consult your own attorney who has experience in these matters, not rely only on what the new employer has to say about it.
Also, you should have any new non-competes you sign review by your own attorney, to see if there are any limits that would be an issue for you.
I did a similar move from a company to one of its clients earlier in my career and the noncompete wasn’t enforceable per my employment law attorney (that I happen to be married to so for the advice for free lol). Most of the time they’re not enforceable so try googling or schedule a consult with a local employment attorney. Also if you know of others who have made the same company to company move odds are it’s not enforceable
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