How enforceable is a non-compete clause?

[jriera]

Rick, seems that you non-compete is like mine was, no soliciting employees for a year, no soliciting from previous customers for a year plus IP/non-disclosure ... nothing of that prevented me for joining a new company even if the new company has common customers with my previous company; I just don't work with those customers, other people do.

Jim, non-compete, non-disclosure and IP go hand-on-hand or at least to me from a 'moral' perspective, I have been dealing with source code, customer information, NDA's, etc. most of my adult life (a long while by now ..) there is a 'magic' line that I will never cross. IBM's case with Apple regarding Papermaster was non-disclosure, I follow that case closely ..

[jyl]

A software firm I've run across is Vocus. What they do:

Our web-based Public Relations software suite helps organizations of all sizes manage local and global relationships and communications with journalists, analysts, public officials and other key audiences. Our integrated software modules address the critical functions of corporate communications and public relations. It helps organizations manage large amounts of information, deliver consistent and well-executed communications, collaborate among large or geographically dispersed teams and analyze and report on the effectiveness of their corporate communications and public relations.

As part of our PR management solution, we provide an extensive database of over 800,000 records, including journalists, analysts, public officials, media outlets and publicity opportunities. Our database is integrated with our suite of on-demand modules that together address the communications life-cycle from identifying key contacts, to distributing information, to closing the loop with digitized feedback and management analytics.

We deliver our PR products and services over the Internet using a secure, scalable application and system architecture, which allows our customers to eliminate expensive up-front hardware and software costs and to quickly deploy and adopt our software. Due to our modular design, we are able to easily combine capabilities into pre-packaged editions with optional add-on modules, to meet the needs of a wide range of organizations, regardless of their size or specific corporate communications objectives.

Here is their careers page.

http://www.whyworkatvocus.com/opportunities.asp

Might be up your alley, and not a direct competitor to your existing employer?

[Rick Lee]

Thanks, JYL. I know them well. They were calling me a lot a few years ago, but were small potatoes back then. Now they are a serious competitor I run up against pretty regularly.

[jyl]

Oh, okay. Well, if they are hiring . . .

You are not going to be able to get a black and white answer on the meaning of your non-compete, because how much justice you get is a function of how much justice you can afford. Even if the non-compete "should be" unenforceable if fully litigated, an employer can make that litigation too expensive for you - or they just can let it go.

So, don't let it stop you from finding another job in your industry. If/when you find that job, and if your current employer asserts the non-compete, deal with the problem at that time. Your new employer may be motivated to help with the lawyering, do be honest w/ them about it.

[Rick Lee]

Yes, I would fully expect to be asked about a non-compete in the first conversation with any competitor. I really would like to contact a few now, but it's probably premature from a legal standpoint. If my current job keeps me, then I'd be inviting a big problem by leaving for a competitor. Of course, I can't stand the thought of waiting until I'm canned to start a serious job search in my current industry.

[jyl]

I'm not sure that I would wait. It is a tricky decision. Some industries are leaky with gossip, others aren't. Some people you can trust, others you can't. Any way to network w/ people at different companies in your industry, with no resumes involved?

[Rick Lee]

Well, I certainly wouldn't just fire off a resume via email or someone's careers page. I'd call the recruiting boss directly and I'm pretty sure they'd be professional and keep it all quiet. Hey, at least if it got back to my current boss, there'd be no question that I'm getting fired and sooner than later. My concern is that my company is so unpredictable, that my boss might be bluffing about firing me and so I might be safe and just not know it. What if I leave preemptively to go work for a competitor? And how do I tell such a place that I'm about to be fired or laid off and am not leaving on my own?

[Dottore]

Rick:

I have in the past been involved in several situations with clients where the terminating employer agreed to waive the non-compete as part of the severance. Might that be an option for you?

In many cases these non-compete clauses are included in employment contract as a matter of course, and the employer really has no interest in enforcing them if he is terminating you for reasons not related to your performance (ie. downsizing reasons).

This might be something to bear in mind in any severance discussion. No one likes to lay people off and employers can be quite reasonable (even generous) in these situations.

[Dueller]

As a general rule of thumb, courts evaluate the reasonableness (admitedly a term of art) of non-compete agreements. E.g., say you're a pest control guy (this is a very common area where NC's come up) and you have a route in various neighborhoods in a 10 mile radius. Your employer has worked hard to develop the business/service customers in that area. You quit and go to work for a competitor. NC likely enforceable within a narrow geographic area for a reasonable period of time/area...say a year or so and 20 mile radius. But wouldn't be enforceable for the entire state or for 3 years.

OTOH...say you sell paper products to school systems in a state. Go to work for a competitor and start calling on the same customers. May be more likely to be enforced state wide.

Don't really know the nature of your business. But one thing is certain...if your prior company comes after you, it will not be to recover from you....you're chump change. They want the deep pockets of the company you go to work for. You're just a facilitator.

If you do go to work for a competitor, make sure they are aware of the non-compete and they agree to indemnify you if you're sued. IN WRITING.

[legion]

Originally Posted by Rick Lee

My concern is that my company is so unpredictable, that my boss might be bluffing about firing me and so I might be safe and just not know it.

I wouldn't want to work for a company that acts that way. (Not that you have any real choice in today's economy.)

The way I see it, telling employees they might be fired is not a good motivational technique and will probably lead to more people walking out the door.

[Rick Lee]

Again, my territory is from TX and all the way west. So it's pretty vast and I've touched clients and prospects all over it. But that's the marketplace for my business. Most of it is in CA and TX. Even if it were just confined to Wash. DC, there's still a huge amount of business in that small town. Basically, the NCA intends to keep me from doing the same line of work for any competitor, or at least, that's how I read it.

Just got off our weekly conf. call and March has a particularly high revenue goal. I'm very concerned about meeting that goal, but the worst part is that I can't even track my revenue until I get my commission file around the 6th of April. I'll be flying blind with no idea as to my progress.

[stealthn]

In my opinion, that non-compete would not hold up. The "prospective customer" portion would mean anyone anywhere, thus preventing you from ever working in the same business for the term, and stopping you from the right to earn.

This is just my opinion (not a lawyer) but this is too open.

Good luck with whatever happens....what's Pelican pay for moderators

[TerryH]

In 2006 my franchise contract expired and I consulted a lawyer on the non-compete clause. California is a right to work state and non-competes are almost impossible to enforce. I believe this can vary by state.

[Rick Lee]

From my reading, CA flat out does not recognize non-competes, except in very limited circumstances. AZ is a little more liberal there, as a blue pencil state. But it does vary a lot from state to state.

[Porsche-O-Phile]

You might be able to also argue that it represents unfair restraint of trade, but I'd ask an attorney about it. I've heard of this argument being successfully used by people in my profession. I don't know if it would apply here or not or if there's any difference with respect to licensed professionals or not... Might be worth asking though.