Non-Compete

Silver Bullet

Have any of you guys ever had to sign a non-compete agreement? I did when I first started working with my current employer. I have been made an offer by another company to come on board as an engineer but I am concerned about this non-compete agreement. It basically says that I can't work in this field in the area they cover (which is 1/4 of the US) for 2 years.

I am just looking for someone that may have been in a similar position and their story. What happened?

dynamik

Typically, this means you just can't compete against them either with another company or on your own. For example, if you work for an antivirus company, you can't go work for another antivirus company.

It might not even be that broad. We have some salespeople here that have come from other companies that they had non-competes with. They were actually allowed to compete with their old companies for new customers, but they weren't allowed to contact any of their old customers for something like 12-18 months.

You might want to have a lawyer look at it if you're unsure of the wording. What type of service(s) do they provide?

Silver Bullet

dynamik wrote:

Typically, this means you just can't compete against them either with another company or on your own. For example, if you work for an antivirus company, you can't go work for another antivirus company.

Yeah... That is exactly what it means. The problem I see is that both companies do the same thing. The only thing is, is that they don't target the same customers.

dynamik wrote:

What type of service(s) do they provide?

Hardware and Software repair. 3rd Party Support. Network Design, Implementation, Monitoring and Management. Printer and Copier Repair. Project rollout type stuff. And Sales of all the equipment they service.

Silver Bullet

Silver Bullet wrote:

The only thing is, is that they don't target the same customers..

I guess they could target the same customers though.

famosbrown

I've had one but only with contractors. It only prevented me from quitting and going with another contractor doing the same job within the same contract. It did not affect me if I went elsewhere on another contract or with another company.

There are usually multiple contract companies hired to do the same job for a customer. Without the non-compete agreement, you sign with another contractor for more money doing the same job. It is also a way to prevent employees working directly for a company to sign with a contractor who is paying their contractors more money to do the same job as the direct company hired person.

Just my experience with them. If you are REALLY concerned, I would contact someone from your old job, unless you burned bridges to ask, or seek legal advice to fully translate the agreement.

Silver Bullet

famosbrown wrote:

Just my experience with them. If you are REALLY concerned, I would contact someone from your old job, unless you burned bridges to ask, or seek legal advice to fully translate the agreement.

It hasn't gone that far yet. They don't know that I have the offer yet. Gonna give it some thought over the weekend and decide what to do next week. Get my thoughts together etc..

I have an Uncle who is an Attorney, just in another state. He thinks it would be enforceable if I were to go to work with the company and they provided the same service. Which they do... just not to the same customers.

dtlokee

It reall comes down to the way it is written and if they decide to try to enforce it. If the terms are considered to be too broad in scope or duration a court may find the non-compete to be too broad and can either invalidate the entire agreement, or if you live in a red line state the court can rewrite the agreement to something more agreeable. 2 years is not typical for the duration of a non-compete (atleast in New Jersey) and may be found to be unreasonable. This may just cause the court t reduce it to 1 year or 6 months or whatever.

Your employer may not choose to enforce the non-compete, but this act alone can invalidate the non-compete agreements of all other employees (it could be argued as illlegal to discriminate in choosing what non-competes to enforce and not to enforce), so they are pretty much backed into a corner and need to enforce them.

so the question is, do you feel lucky?

leefdaddy

I had one at my last position working for a company that provided 3rd part support to businesses etc... I took a new job with a company working on their internal network. They weren't a competitor or a customer so there was no problem.

Geek USA

Has anyone had an employer enforce this?

GT-Rob

I have been under 2 that I have "broken", and never heard a think about it.

Unless you are going to deal with your company again, or use them as a reference, they are never going to know you are working for a competing company.

Not to mention they would really have to justify that they are losing money because you are working for "the enemy", to make the cost to pursue legal action worth it and to actually win. The only time I would see it a problem is if you knew company secrets and used them with a competitor.

dtlokee

Geek USA wrote:

Has anyone had an employer enforce this?

Yes. Don't underestimate them because common sense isn't law. A company doesn't need to justify they are losing money to enforce the a non-compete, that isn't the intent. It is to protet whater intelluctual property they may have including contacts, business methods.. everything. Many non-competes also include a non-disclosure and non solicitation clause as well. All the company needs to do to prove a case on a non-compete is that they had a customer in their database at the time you resigned that is also a customer of the company who hired you. Again, it's not common sense, and it can seem over the top.

Non-competes have become so restrictive in many cases some companies will not hire somone who has a binding non-compete from a previous employer because they may need to terminate the employee at the order of the court, and possibly face leagal action against them.

The problem is many companies are now starting to use them as employee retention policies. I'm serious. Companies can see them as a way to prevent employees from leaving the company. They have come a long way since the original intenention. I was once asked to sign a non-compet with a scope clause that was something like this:

The scope of this noncompete shall be:

1. The planet Earth unless found too broad by an enforcing body then 2. North America, South America, Europe, Africa, Asia and Australlia unless deemed too broad then 3. North America, unless deemed too broad 4. The United States uness deemed too broad 5. The United states East of the Mississippi River unless deemed too broad 6. the states of .....(and so on) all the way down to 12. the area of Philadelphia between 8th and 1th street and Vine st to Race st.

There were also similar clauses covering the scope of what is covered. That's some crap.

So again, the question is, do you feel lucky?

Silver Bullet

dtlokee wrote:

So again, the question is, do you feel lucky?

I have a feeling that is what I am going to be dealing with is luck. The luck part being that they don't find out where I went if I decide to accept the offer. Because I sure wouldn't volunteer the information.

I know a former employee left and went to another company that provided 3rd party support but they never said a word to him. But I know for a fact that the company he went to does not service any customers that the company I currently work at services.

Now that I sit back and think about it, there are 3 companies that both the company I currently work at and the company that made the offer service.

This really sucks because this is for more money and a position that would allow for a lot more experience in a variety of areas.

I need a psychic to tell what the outcome would be if I accept.

dynamik

I would definitely talk to a lawyer and/or HR in one or both of the companies. I've heard of people being absolutely cleaned out (to the tune of $100,000s) for breaching their non-competes. Again, these were salespeople. Your case seems like it is a slightly different story, but even so, I wouldn't want that hanging over me if I were you.

dtlokee

Silver Bullet wrote:

dtlokee wrote:

So again, the question is, do you feel lucky?

I have a feeling that is what I am going to be dealing with is luck. The luck part being that they don't find out where I went if I decide to accept the offer. Because I sure wouldn't volunteer the information.

I know a former employee left and went to another company that provided 3rd party support but they never said a word to him. But I know for a fact that the company he went to does not service any customers that the company I currently work at services.

Now that I sit back and think about it, there are 3 companies that both the company I currently work at and the company that made the offer service.

This really sucks because this is for more money and a position that would allow for a lot more experience in a variety of areas.

I need a psychic to tell what the outcome would be if I accept.

I am not an attorney and I think you should contact one, but from what I know about non-competes (I have them with my employees) if you can document other employees who have rsigned from the company and the company haven't tried to enforce the non-compete you have a case for dismissal because they are singling you out.

Silver Bullet

Just wanted to post a follow up here.

I did discuss this with my Attorney and he thought it would be a gamble. So, I turned it down and went to talk to my employer about it. I ended up getting a promotion and raise. So it worked out.

Thanks for everyones input.

BigTone

wow....


...Score for you!

dynamik

That certainly is one way to resolve the matter. Congratulations!

Plantwiz

dynamik wrote:

I would definitely talk to a lawyer and/or HR in one or both of the companies. I've heard of people being absolutely cleaned out (to the tune of $100,000s) for breaching their non-competes. Again, these were salespeople. Your case seems like it is a slightly different story, but even so, I wouldn't want that hanging over me if I were you.

If this new job is that great of an opportunity, talk to both companies and an attorney it needed too.

You may find the current employer will agree to void the contract. It is definitely an interesting position to be in....I guess what made you go looking for something so similar? It is entirely possible that the current employer will be annoyed you did this and enforce the contract entirely.

Get your ducks in a row before proceeding, so you all can win.

Khaddar

Well, I didn't read what other people posted here in detail, butttt from what I understand it depends on the state law.

If you are in a non-union/right to work state. They CANNOT enforce a non-compete clause. Union/Right to live states, can. Honestly, they are rarely enforced.

Do a web search involving right to work. I wouldn't worry about it too much cause.

Or you could just not tell them your going to work their and if it is a large company they probably won't figure it out.

Just my 2 cents.