Non-Compete document
 

My employer sold assets of the company.

New owner is motivated, excited to grow the business. Lots of potential.

I joined this company 3 years ago after a layoff. I am a sales manager, with measurable improvement in sales during my time. Not that I have made everyone happy. But since I had been laid off, I was a bargain.

So, I've been waiting for this ownership transaction, my opportunity to get paid fairly and continue to grow the business.

All the positive back slapping and rainbows and unicorns are setting off warning lights. I've seen this before. Have been told "you're on the team" and "everything will be the same".

Now, there is a non-compete document that I've been requested to sign. Would have preferred to have i's dotted and t's crossed first. red lights. siren. 2-year agreement.

What if I sign it, and then get demoted? How enforceable are these non-competes?

Am thinking I need to delicately sell myself and get buy-in to a modified pay plan before signing non-compete.

Any advice?

Where do you live? Here in California the state really won't side against you. They don't want to pay your welfare.

Talk with your LOCAL attorney

what state

He's in Dublin, Ohio...(see his avatar).

What do you sell, no lift?

Ohio. Company is based in North Carolina if it makes a difference.

The Non-compete I got from the PO was worth almost as much as the paper it was written on (but I outlasted them all).
Jim

Ha! You need two lawyers then.

You might try inserting a provision that if X then the non-compete becomes null and void.

But drafting these things is like doing surgery on yourself - you really need a pro.

There is also a small book by Malcolm Gladwell on gut feelings - the bottom line is that a gut feeling is often a gestalt unconscious evaluation of something that can be very accurate. So, maybe pass on this job offer...

Not a lawyer like RWebb, but in CA at least its unenforceable. Usually they only stick if they agree to pay you during the non-compete timeframe.

Is a non-compete ever enforceable if you're let go? I can see if you quit on your own to go to a competitor, but, if you're let go, you have to be able to make a living in your line of work. We fired a really good guy recently and did it in a very bad way. He had a non-compete in place, but I sure wouldn't be surprised to see him working for a competitor soon, calling on our clients and probably having downloaded everything we had on competitors and selling the thumb drive to the highest bidder.

Ohio non-compete information

While as pointed out, non-compete's are fundamentally non-enforceable for most jobs, for reasonable circumstances they can be. However, they usually require some sort of consideration "in-kind" as part of a separation payment.

Unless the company truly has unique/proprietary technology/process/information and/or a lock in a particular market/geography, tossing a non-compete into a non-contractual employment offer is a junior move. Or without the advise of competent HR counsel.

Reasonable is the key word - you can't prevent people from working. But you can enjoin them from using unique advantages that would have only been gained from the exposure to the job. So they could prevent you from selling a competitive product in Ohio, but not in Nevada.

They are also put in to attempt to limit competitive employer attraction - from someone that feels they could be enjoined from working to just not wanting to deal with it. When I look at an employee with a non-compete, it takes about five minutes to figure out if it is a real threat or not. Mostly not.

It is reasonable to restrict use of information however. Client names, pricing, costs, etc. That is a much easier standard to reinforce and is very effective at mitigating potential damage.

A non compete from my previous employer (in Ohio) is the reason I am a student at the moment. If you refuse to sign, you will most likely have to find new employment. Continued employment is considered enough of a compensation for signing the non-compete. There is some good info in the link Don provided.

But, as others have said, speak to a lawyer.

As said, get a lawyer.

And, go ahead and plan out what questions you have with the current document and its validity and actual protection/prohibitions, and plan out what you would like as far as protection. Don't go to the lawyer with a blank slate.


(and yes, I've been to law school. cut thru there one day while headed to my dad's office and had to find a bathroom and wanted to find a vending machine. Took about 10 minutes, so the above advice is worth the 0s and 1s it was sent with)

I was at a sales meeting (in Ohio) and the new sales manager handed out a non compete form. The sales rep sitting beside me was a lawyer and he told me to not read it, sign it and hand it back. Afterwards over drinks he explained the reason why. As they had basically told us to sign it or else if they actually decided to try and enforce the agreement you could argue they forced you to sign or you would loose your job. By not reading it you had no understanding of the contents and because you were forced to sign you didn't need to understand the agreement. He also pointed out that they never supplied a copy for us so it was null and void because you could have signed anything that they presented. We were also given no time to consult a lawyer. As mentioned before they would have to sue in each state you operate in to enjoin you from earning a living. Which means huge legal bills for them.

Now saying all that see a labour lawyer and turn it from a non compete agreement into a employment contract. They don't want you to work for two years, then they should pay you for that period if they end the contract.

Non competes are essentially unenforceable in Ohio. Our artist took our client, took the work he had been developing for her, and started working for her out of his basement. We had a non-compete. Lawyer said fuggetabout it.

This is pretty much the case every where. No competes are almost always un-enforceable. More a scare tactic. Employers almost always have more money than the employee and threat a law suit and damages that's usually enough to scare the employee. But if push comes to shove the employer rarely tries to enforce it. You have a right to earn a living and no judge/jurisdiction is going to uphold any document that prevents you from earning a living.

Talk to a lawyer if you are worried.

I'd sign it, forget it, and move on with my career. BTDT many times and no company has ever cared when I left to join a competitor. I've never worked for a company or talked to a recruiter who would hesitate at the idea of poaching an entire practice or a department worth of employees from a company because of a non-compete.

my research on the subject suggested that reasonable non-competes have potential and unreasonable non-competes are worthless.

tough part is quantifying the negative impact you get from hesitating to sign.

I've seen a lot of job ads that ask if the applicant is subject to a non-compete. I am, but only within my current line of work, so I answer no, because I have been looking in other lines of work.

The law of non-competes is very complex. They can be enforcable under the right circumstances if they are drafted correctly and supported by adequate consideration. The non-compete will be drafted by a lawyer who's job it is to protect the company at your expense. You will be extremely foolish not to retain your own lawyer - an employment lawyer who has special expertise in the area of non-competes.

The problem with signing a non-compete goes beyond whether it is enforcable. The only way you find out whether it is enforcable is to go through litigation and get a court order on it. In the mean time the (former) employer will be able to keep you from getting work simply by informing every potential employer you are talking to that you are the subject of a non-compete with them and that they intend to enforce it.

The threat of another employer asserting a non-compete against you, whether it is enforcable or not, will be enough to keep you out of work until the agreement expires.

On the other hand, a well drafted and fair non-compete provides protections for both you and the employer, and reflects that you are a valuable member of the company who is trusted with unique knowledge that is vital to the success of the company. The trick is to negotiate a non-compete that protects your interests as well as the company's. You need a lawyer for that.

I doubt most employers know when they have employees looking for work with competitors. Maybe it gets around the grapevine if companies have moles within one another, though that would be unprofessional. I know our main competitor is seen as an arch enemy and their VP of sales was fired by our company and on very bad terms. It was a while ago, o he has no friends left here, and wouldn't hesitate to hire someone who had a non-compete. Sure, you'd be blacklisted if your employer knew you were looking and they pro-actively contacted anyone you might be applying to. But that sounds pretty unlikely and unprofessional.

We have another competitor who's hiring and offering way, way more for the same job than we pay. It's tempting, but I think our company might acquire this one within the next year. And if I ignored the non-compete, left on my own to go there and then they got bought out by my then-former and scorned employer, I'd be fired on day one of the new ownership.