Virginia No Compete clause - hold up in court? (Richmond: sales, insurance)

[sjankis630]

I was talking to my Brother today and he and I were saying how we were happy to have good jobs. He works in Richmond VA and I work up here in Northern VA.
He works for a company that provides care for those moving from the hospital to rehab and from rehab to home.
Anyway his company is being bought out and it seems that he is the only person in his group that has not signed a no compete clause.
I had never heard of this in VA before. I have heard of NDAs (non disclosure agreements) where two companies team up and each promises not to reveal the others rates etc.
But apparently he is going to be asked to sign an agreement (he is not forced it is voluntary- but the pressure is there) which states if he quits or is fired by his company, he cannot work for a similar company or do similar work within a 100 mile radius for a year after he leaves.
The part that gets me is that he is supposed to be bound by this even if he agrees to sign and then is fired - but would not be able to get work nearby in the same field.
Has anyone else dealt with these before? I have worked for over 20 years and this is the first I have ever heard of something like this that was not at an executive level (which he is not).
It just doesn't seem to me this could hold up in court.
But IANAL so there you go.

[sullyguy]

No competes have little merit in Virginia, however the company asking for the no compete could be using the laws of a different state or DC instead - and those are killers. I knew someone who lived in Virginia who signed up with a Maryland firm to work at a DC company and had the no compete under the DC laws - a VERY pro-union - that is, pro-contract - jurisdiction. She left THAT company and signed on with another contract shop and got sued by the original company. Her attorney (paid for by her own bodyshop) had a VERY bulging briefcase FULL of cases; she said she usually represented the bodyshops, not the bodies!

Anyway, to end this...a contract is a contract. It is negotiable by ALL sides. If you agree to sign a no-compete, then at least make the no-compete palatable to YOU. Limit the timeframe to something reasonable like a couple months - that protects the company, yet allows you freedom. Limit the scope of the no-compete - make the entity at which you will not compete be the GROUP internal to the target company, or the MANAGER of that company; that gives you freedom to work elsewhere int hat company.

I once signed up with a bodyshop that used to be called Comsys (don't know what it's called now; it was the largest in the DC area, I believe). Anyway, they had a PREinterview no-compete that said something like "no compete for a year and no compete for the target company ANYWHERE" even though I wasn't even employed by them yet - just SENDING me on an interview with no guarantee of a job would have severely restricted my freedom for a year. I refused to sign it since the company I was going to be working at was international in scope. Comsys used the laws of DC and Maryland for its contracts. Since then I have strictly limited no-competes and have been very up-front about that BEFORE any job interviews.

[sjankis630]

sullyguy,
That no compete clause is ridiculous! It reminds me a little of the first time I came into NOVA to work and one of my interviews (these were the first I had ever had outside of school) and one company I interviewed at was basically a headhunter. This was back right around 1989 so I had never heard of the phrase before. Of course I was a nobody and had no clout or money, so imagine my surprise when I got to the end of the first (and last) interview and saw that they expected me to pay them around $500 to get me a job. (if I had $500 I sure wouldn't need them!)
Got to probably my third interview at an insurance company. The second to last question on the very long second application was the following; "Do you think you could have the names of 20 people who you could sell insurance to and bring them to the next interview?" Yeah right!
Sometimes not getting the job is the best deal - assuming you have the time and resources to survive while you look.

[michgc]

My husband's company made all of their employees sign a non-compete. It was that they didn't want someone quitting and taking trade secrets with them to a competitor, I believe. However, they are now closing his office and offered everyone jobs at the home office in another state. The company said they would not enforce the non-compete for anyone who didn't take the job in the new state since it was the company's decision to close the office. So they were pretty reasonable about it.

[sullyguy]

Originally Posted by michgc

My husband's company made all of their employees sign a non-compete. It was that they didn't want someone quitting and taking trade secrets with them to a competitor, I believe.

An NDA - nondisclosure agreement - is a different animal from a no-compete. The former requires the employee to not reveal whatever is covered by the NDA but doesn't usually include no-compete clauses - there are LOTS of exceptions to that, of course, since some individuals, just by taking a job at a competitor, can be (often validly) accused of taking their corporate knowledge to the competitor as well. NDAs, BTW, often are MUCH longer in term than even the worst no-competes.

A no-compete is used, however, NOT to protect corporate proprietary information OVERTLY but to prevent corporate assets - the employee - from literally becoming a competitor. Virginia, being a Right to Work state, frowns on no-competes but (probably, I don't actually know) has no problem with NDAs.

[for the prior poster who mentioned that the Comsys no-compete agreement was ridiculous - I may actually have gotten it wrong - after reading your words I =think= I remember that the no-compete said something like "no working at any company we work at" rather than "no working at any location of the client company we send you to interview at". That is, of course, beyond ridiculous. Note - I could be re-remembering wrong]

Bottomline - no-compete agreements are contracts - you can negotiate contracts. Do so.

[sullyguy]

Originally Posted by sjankis630

saw that they expected me to pay them around $500 to get me a job

Though this is a major deviation from the original topic of the thread, there is a pretty hard and fast rule about headhunters and bodyshops (headhunters find "heads" (employees - typically executive level though can be lower) for client companies, bodyshops temporarily sell bodies to client companies) - the bodies don't pay - the client company pays. This may be so, however, only for the greatly-in-demand tech fields.

[roninsedge]

Originally Posted by sullyguy

Though this is a major deviation from the original topic of the thread, there is a pretty hard and fast rule about headhunters and bodyshops (headhunters find "heads" (employees - typically executive level though can be lower) for client companies, bodyshops temporarily sell bodies to client companies) - the bodies don't pay - the client company pays. This may be so, however, only for the greatly-in-demand tech fields.

Mostly right, headhunters will work for companies seeking employees and people in high demand fields seeking employment. If the headhunter works for the person seeking employment then they get a commission from the newly employed person. Usually a percentage of their first years wages.

[Middlin]

My husband has worked in sales for years and has signed many of the non-complete documents. For the most part, unless the contract is very, very specific, it doesn't get much traction in Virginia. Most of them are worded so broadly that most could argue that you can't deny a person's livelihood. For instance if you sell cell phones and the contract says you can be sued for taking a job at a competitor within a 100 miles......this will not hold up in Virginia. Now the flip side to this, is that some employers are leery of anything that might smack of a court case, so if you sell a like product from the employer you are leaving and call on the same customers of the employer you left withhin the stated time frame......this is an area you need to be careful with.

[stpickrell]

Originally Posted by roninsedge

Mostly right, headhunters will work for companies seeking employees and people in high demand fields seeking employment. If the headhunter works for the person seeking employment then they get a commission from the newly employed person. Usually a percentage of their first years wages.

Even then, a legitimate shop would typically only collect once they get you a job.