How enforceable is a non-compete clause?

[Rick Lee]

If I'm:

A) fired
B) laid off
C) quit just before they fire me

Obvioulsy, it would look suspicious for me to call my HR dept. now and ask for a copy of the non-compete I signed years ago and which I didn't keep for myself. My days at my current job are numbered. I am in a real dilemma if they don't fire me in a month, as they've said they likely will. If they don't, then I'll be doubly in fear for my job every day and obviously pounding the pavement for a new one. I've heard non-competes are seldom enforced if someone is let go. But what if I jump ship first because they've given me a heads up that it's coming?

I don't much want to work for any of my competitors, as I've been pretty good at stealing their customers and making the case for why my company is better. But it seems to me some of those guys might be very interested in picking my brain. And after my last trip to LA, I am more convinced than ever that the competition is much better positioned there than we are. Join them? Get sued? Make enemies of my former co-workers?

[legion]

Logic (which has no application in law) tells me that you would probably be in a better position going to a competitor if you were fired, in regards to the non-compete clause.

[Rick Lee]

Well, if I keep my job long enough to find my next one, I'm pretty sure I could get myself fired very easily. But talking to the competitors is very risky behavior.

[911Rob]

Hey Rick,
Sorry for your situation buddy, that's too bad.
Doesn't sound like it would hold up to me?
1. They "made" you sign it as a condition of employment (duress)
2. They failed to provide you with a copy of what you signed, having it notarized explaining the proper legal implications

Go 4 it.

[Don Plumley]

In most instances, non-competes are difficult to enforce. That being said, customer lists, pricing, contracts, cost data and other similar sales information is intellectual property and using them can trigger an injunction quicker than you can say, "attorney".

In general, people have a right to make a living, which makes non-competes hard to enforce. However, if you are given any type of severance, they typically come combined with a specific non-compete for length of time the severance represents in terms of your standard compensation.

Specific non-completes: named accounts, geographies, etc. are easier to enforce. For example, if your non-compete says you can't for 24 months call on customers in the Phoenix area, you can then make a living by calling on customers in Tucson.

The bigger challenge is a new employer may not want to hire someone with a non-compete just for the hassle factor. Even if non-enforceable, it at minimum involves letters between corporate counsel and at worst involves the threat of trial.

Of course, not keeping copies of legal documents you sign is not the swiftest move.

Sorry to hear about your job situation.

[the]

Originally Posted by 911Rob

Hey Rick,
Sorry for your situation buddy, that's too bad.
Doesn't sound like it would hold up to me?
1. They "made" you sign it as a condition of employment (duress)
2. They failed to provide you with a copy of what you signed, having it notarized explaining the proper legal implications

Go 4 it.

lol, stick with the construction stuff, not legal advice.

[Dave L]

I have signed a few noncompete's. One included that I couldnt work for a competitor in the same territory that I was currently in. I did end up going to a competitor and no one asked what territory I was looking after. Another stipulated that you cant call your existing customers for a definded period of time (cant remember the exact details). You have to get a hold of that document to see the exact clauses in it. With all that said, they cant prevent you from making a living. If you have X number of years in an industry they cant just say that you cant work in that industry.

You wont make enemies if they were good friends to start with. If they wernt friends then who cares? I worked for a guy who went to another company to be a sales manager. One month I killed him taking one of his best customers, closed another deal that originated with him and kept a customer selling directly against one of his guys. We kept in contact and still had lunch together for quite some time (have since lost touch)

[Hugh R]

I think the only way a non-compete clause is enforceable is if they pay you for the time that you can't compete, otherwise they're depriving you of a right to make a living. Not a lawyer though.

[Don Plumley]

Originally Posted by 911Rob

Hey Rick,
Sorry for your situation buddy, that's too bad.
Doesn't sound like it would hold up to me?
1. They "made" you sign it as a condition of employment (duress)
2. They failed to provide you with a copy of what you signed, having it notarized explaining the proper legal implications

Go 4 it.

Not in California, probably not the US. Basically everyone is an "at will" employee (unless you have an employment contract, negotiated labor agreement, etc.). You don't have to sign anything, you can just not accept the employment. And standard employment documentation does not need to be notarized nor explained beyond what the document says. Every HR person or hiring manager should be coached to encourage the employee to seek their own legal counsel if they want an opinion. However, refusing to sign means you are willing to quit. I've had more than my share of cranky engineers not wanting to sign IP and confidentiality agreements.

And the key of "at will" employment means that severance is not a legal obligation of the employer. Nor is notice by the employee. However, it is common practice for employees to give reasonable notice of their intent to leave the employer as it is common practice for employers to pay a couple weeks pay "in lieu of notice" when they terminate someone.

[Noah930]

IMO, it doesn't look suspicious to ask HR for a copy of the policy. You can tell them you've heard that you're probably going to be let go, soon. Your copy of your contract is in storage in VA because of your move, so it's not so easy for you to dig it out and look up the specifics. After all, it's not like you moved cross-country expecting to leave this job and have to find another. But, because you obviously have a skillset in a certain field and may continue work in that general area, you'd like to know what you're allowed to do and what you're not allowed to do if/when you get the axe. Doesn't sound suspicious to me, but maybe I'm naive.

[legion]

Will your soon-to-be-former employer have the resources to enforce a non-compete?

[9dreizig]

Non competes are pretty much impossible to enforce. HOWEVER that doesn't mean they can't make your life miserable. I can't imagine in this enviroment that anyone is enforcing them..
What do you sell again ?
I would worry about your short time in the territory since they just moved you out there right ?? They COULD POSSIBLY go after the moving costs if you quit

[Don Plumley]

Originally Posted by Hugh R

I think the only way a non-compete clause is enforceable is if they pay you for the time that you can't compete, otherwise they're depriving you of a right to make a living. Not a lawyer though.

That is one way to ensure that a non-compete is enforceable - pay for time (not a lawyer though, but have signed and initiated many non-competes for ee's).

However, named accounts and specific territories/regions are much easier to enforce, depending up specific States employment law.

[9dreizig]

Another thought Rick,, does your current employer know of your attraction to guns ?? LOL

[Noah930]

Also, note that the ability to enforce (the enforceability of?) non-compete clauses varies from state-to-state. At least it does in the world of medicine. VA law and AZ law may be different than whatever advice we're giving you, here. And, at least in contracts that I've gone through in my personal jobsearches, non-competes would have varied depending on whether I would hypothetically get released by the employer (fired), versus were I the one to be initiating the split (quit).

[Don Plumley]

Originally Posted by Noah930

IMO, it doesn't look suspicious to ask HR for a copy of the policy. You can tell them you've heard that you're probably going to be let go, soon. Your copy of your contract is in storage in VA because of your move, so it's not so easy for you to dig it out and look up the specifics. After all, it's not like you moved cross-country expecting to leave this job and have to find another. But, because you obviously have a skillset in a certain field and may continue work in that general area, you'd like to know what you're allowed to do and what you're not allowed to do if/when you get the axe. Doesn't sound suspicious to me, but maybe I'm naive.

I generally agree - talk to HR and ask for a copy of your paperwork - it's your right. However, the only issue is a smart HR person (depending on the size of the organization and the level of the HR contact) will probably send a note to your manager. This puts you on the radar as someone that a) is ready to be laid off; b) is thinking of quitting; c) is being approached by a competitor.

While you might not want that attention, it would be a lot smarter for you to know if your non-compete is an issue or a non-issue before hunting for a job.

[drcoastline]

There are a lot of factors involved in a non compete. State, job, filed of work, circumstances behind the change, etc. But generally speaking they are difficult to enforce. However, they they can be very costly to defend. As don Plumley stated you "have a right to earn a living" that is key. The more specialized your field is the narrower your options the more difficult it is for your ex employer to enforce unless they paid for your education. The hair cuttery who sends a girl to school is going to have an easier time defending their non compete against a girl going to a shop down the street than say a bio self educated neurosurgeon. That being said I would advise do not quit. It Will be easier to defend if you are fired than if you quit. I wouldn't worry about asking for a copy of your non compete it really isn't going to make a difference in the long run. In this economy I think any judge worth their weight (which isn't saying much I hate all lawyers) Willl understand anyone trying to make ends meet. That is a very different scenario form say two years ago when people were looking to make as much as possible.

[911Rob]

Originally Posted by the

lol, stick with the construction stuff, not legal advice.

WHAT are you talking about? This is getting to be a tough crowd lately at PPOT? Maybe I should start a thread stating that I'm going bankrupt and I'm gonna screw over everyone that I owe money too. You know, to make some friends around here? Jeesh.

I've "taught" more lawyers about contract law than they've ever advised me about. I know I might come across as an arrogant prick sometimes (Ha); OK, most of the time, but my posts are sincerely to help or assist, not to attack or judge. I'm just an old fart that has done alot of shat in his life, if you dont want to listen to my point of view, dont. Take some guys point that is offering his 'theory' then.

1. First point. The employer offers you a job, but in order for you to get the job you have to sign their documents without legal representation or at the very least having them properly notarized, whereby somebody with a background in legal documents explains them properly to you before you sign. Simply signing a document in front of Mrs. HR doesn't cut it imo. If you needed the job badly, you would sign anything they put in front of you, just get me the frickin pay cheque already. A lawyer can argue this easily in either Country. On top of that, they don't provide you with a copy of a document that they expect to uphold in the court of law; sorry, that ain't gonna fly either. Full disclosure means providing copies to ALL parties that sign. Period.

2. Pretty much explained in 1, but my second point is that when you sign a document that is expected to be held up in the court of law, that can have legal and binding implications on your person, then those documents must be executed properly either with legal representation or at the very least with a notary that explains the document to you, before you sign. Without this you can legally take recourse that you did not know what you were signing OR the HR gal didn't explain it that way OR the HR girls said this/that. This won't hold up in court either.

Sorry if my first post was too brief to understand, but I assumed Rick would get some legal advice anyway. Good Luck Rick, I hope you get an opportunity to move on soon.

[Don Plumley]

"a notary that explains the document to you, before you sign"

Minor point Rob - in the US a Notary does not do anything but certify that the person signing the document has proof of identification that they are in fact, that person. They don't read the documents, they don't explain them - they just witness the signature.

Here's the ultimate practical consideration. Let's assume that you are right on "signing under duress" or your second point. You will need a lawsuit and probably a trial to prove that point. The reality is you or your new employer will need to be willing to foot the bill to file the suit to find that the non-compete was not enforceable. If I were a hiring employer, this new employee would have to be a real superstar to warrant that potential expense. Which in the financial services industries they are, so they do get litigated. But for average sales guys, not usually.

What's dangerous about this situation for Rick, given your advice, is for him to seek employment with a competitor without knowing the terms of the non-compete, but simply assuming it is unenforceable. His former employer files suit against Rick and his new employer, and his new employer cans him for not disclosing this agreement. Sure, in the long run Rick could win the lawsuit, but he'd be out of work in the interim leaving practical matters such as food and shelter hostage to principle.

dp

[Noah930]

But, hey, as long as you have principle, what more do you need?

Better to know what the rules are, before the SHTF, as opposed to finding them out the hard way after the fact.