Non Compete / Non Solicitation Agreements

[buckeyebri]

Anyone out there bound by a Non Compete / Non Solicitation agreement? What are your thoughts on them? Are they truly legal and should they be enforceable in a layoff situation (Gator)? It actually cost me a couple of job opportunities after the layoff because I had to disclose it.

I had one with my former company that says I can't pursue their clients. I understand that if I were to leave of my own accord and try to take clients, but I don't feel I should be bound by it if I am laid off due to lack of work.

I was recently approached by a former client, from my previous firm, after doing an industry converence presentation about a potential project. I feel I should have the right to pursue that project if they approached me. My guess is my former employer would not subscribe to that theory.

I held off as long as I could with my new employer on theirs. Finally I agreed to it with the caveat that they would release me from it if we parted ways amicably.

I would support and like to see legislation nullifying these agreements in a lay off situation. No one should be able to keep you from working in your chosen profession.

 

[PlanetFrnd]

Anyone out there bound by a Non Compete / Non Solicitation agreement? What are your thoughts on them? Are they truly legal and should they be enforceable in a layoff situation (Gator)? It actually cost me a couple of job opportunities after the layoff because I had to disclose it.

I had one with my former company that says I can't pursue their clients. I understand that if I were to leave of my own accord and try to take clients, but I don't feel I should be bound by it if I am laid off due to lack of work.

I was recently approached by a former client, from my previous firm, after doing an industry converence presentation about a potential project. I feel I should have the right to pursue that project if they approached me. My guess is my former employer would not subscribe to that theory.

I held off as long as I could with my new employer on theirs. Finally I agreed to it with the caveat that they would release me from it if we parted ways amicably.

I would support and like to see legislation nullifying these agreements in a lay off situation. No one should be able to keep you from working in your chosen profession.

Hard to imagine they can enforce a non-compete after they lay you off. I'd seriously look into that. Its my understanding that non-competes are usually for people who leave and, at worst, those fired with cause.

 

[MililaniBuckeye]

I was recently approached by a former client, from my previous firm, after doing an industry converence presentation about a potential project. I feel I should have the right to pursue that project if they approached me. My guess is my former employer would not subscribe to that theory.

Fuck it. What if you take the job with former client? Your former employer is just that--"former" employer. If they've laid you off, then they should have no control over where you pursue new employment. NC/NS agreements were designed to keep employees from jumping ship when approached by clients...since they tossed you off that ship, they should have no say in where you find your next job.

 

[jwinslow]

Non-competes can certainly still apply after being fired. Gator would be a better one to identify the holes to look for in the contract.

Does the contract include anything about the terms of the termination? Whether it applies to this situation as well, or just resignation and fired with cause types?

Here are some quick google blurbs:
http://ezinearticles.com/?Non-Compete-Contract-Basics---The-Employer-Perspective&id=443006
http://virginianoncompete.blogspot.com/2009/02/if-i-am-fired-they-cant-enforce-my-non.html

 

[Flocka]

It all depends on the wording of the agreement.

 

[buckeyebri]

Non-competes can certainly still apply after being fired. Gator would be a better one to identify the holes to look for in the contract, and how you came to the point of signing it.

I had no choice but to sign as terms of employment. It is pretty typical at a Managerial/Client relations level. I am okay with them protecting the company from me leaving and taking their clients. But, if they choose to lay some one off I believe they should not be enforceable.

They came back after the layoff and said if you want your severance payout then you need to sign off and reconfirm the non compete.

 

[BUCKYLE]

Just work for whoever you want. Then, if anyone from your old job comes snooping around, bust them upside the face with a tire iron.

 

[jwinslow]

Fuck it. What if you take the job with former client?

Virginia Non-Compete Law Blog: IF I AM FIRED, THEY CAN'T ENFORCE MY NON-COMPETE, CAN THEY?

The answer depends on your individual contract... and they can always file suit, the real question is whether they will win and have a local court find the contract enforceable.

Most of the agreements I read do not link the enforceability of a non-compete clause to the cause of termination. This means even if the economic down turn caused the company to fire you, they may still be able to enforce a non-compete against you.

and getting back to the emotional side of this

FAIR? No, I don't think so - that is why we encourage folks to consider before they sign but if we are way past that... you may want to call us before you start applying for jobs that would breach your non-compete.

 

[jwinslow]

I had no choice but to sign as terms of employment. It is pretty typical at a Managerial/Client relations level. I am okay with them protecting the company from me leaving and taking their clients. But, if they choose to lay some one off I believe they should not be enforceable.

I agree with the common sense of this, but unfortunately that doesn't work in the legal world.

They came back after the layoff and said if you want your severance payout then you need to sign off and reconfirm the non compete.

Hmm... let me find one of the first links I came across, where they talked about being coerced into signing it, as though it might affect the validity of the non-compete. One sec.

Just work for whoever you want. Then, if anyone from your old job comes snooping around, bust them upside the face with a tire iron.

 

[BigWoof31]

Ask yourself two questions:

1. What state do you live in - if it is a "Right to work" state, the non-compete is total garbage.

2. Your former client is laying people off - do they really have the money to bring an action against you?

 

[jwinslow]

Note, I have no idea how accurate any of this is. I have no idea whether holding severance pay over your head (for your signature) would change things or not, but it did spark my memory of this:

Being fired may not be an excuse, but consider thi

Additionally, a deep discussion will have to take place about the circumstances under which you signed the non-compete. Was there what is called consideration for it? Was it coerced? What discussion was there about the reason it was needed or what the precise activity it barrred.

More interesting advice... here, would your company be reasonable if you approached them about it? Or are they more likely to take action anyway?

Finally, the attorney will have to determine from you what commitment you are willing to make to try to break the non-compete. Frequently the worst strategy is the passive one where you just go out and violate the non-compete and wait for the other side to act. Many times an accord can be reached. This is also pretty much depending on the circumstances of your termination.

Is this a major project that you are "stealing" from them? (from their perspective, warped as it might be)

Or is this small potatoes, and an old enough client that they probably won't care?

 

[buckeyebri]

Note, I have no idea how accurate any of this is. I have no idea whether holding severance pay over your head (for your signature) would change things or not, but it did spark my memory of this:

Being fired may not be an excuse, but consider thi
More interesting advice... here, would your company be reasonable if you approached them about it? Or are they more likely to take action anyway?
Is this a major project that you are "stealing" from them? (from their perspective, warped as it might be)

Or is this small potatoes, and an old enough client that they probably won't care?

I asked the owner to let me out of it since they laid me off or minimally define who I could not talk too. Fourth layoff and over 3/4 of the company gone....They said no...but I could come to them if I though there was a conflict.....YEAH RIIIIIIGGGGGGHHHHTTTTTT....

 

[buckeyebri]

I could actually be in violation of my severance agreement if they knew who Buckeyebri was and if they knew I was discussing it with anyone........oooooooo

 

[MililaniBuckeye]

Virginia Non-Compete Law Blog: IF I AM FIRED, THEY CAN'T ENFORCE MY NON-COMPETE, CAN THEY?

Does buckeyebri work in Virginia?

 

[sandgk]

I could actually be in violation of my severance agreement if they knew who Buckeyebri was and if they knew I was discussing it with anyone........oooooooo

The answer you get always depends on the question asked ... so from an earlier linked source

Lay-off and 2 year non-compete agreement
Question: I work for a large chemical company and signed a non-compete clause which forbids me from working for ANY other company in any business in which my current company does business/sells product for 2 years.

Is this enforceable if I am laid off ? Also, isn't 2 years length unreasonable (and maybe unenforceable). This would effectively keep me at my current employer since I could not earn a comparable living in the area of expertise in which I have worked for 20 years. Thank you !

To which the answer begins:

Non-compete agreement
By: Ann Lugbill
Answer: Assuming that this is a binding agreement upon your, this agreement may likely be found NOT to be fully enforceable if you are laid off or fired. However, parts of it might remain enforceable, depending on a variety of unique factual circumstances (like what was your job, what is the new job, where the two jobs are located, etc.). Below are some excerpts from some Ohio non-compete cases to give you some idea of what types of factors courts consider. You may want to read some of these to get a better idea of the considerations that the courts make, as they tend to be practical in nature. ultimately, you would need a lawyer with knowledge in this area to more fully explain your rights and obligations.

"[T]he law does not favor restrictive covenants * * * this measure of disfavor is especially acute concerning restrictive covenants among physicians, which affect the public interest to a much greater degree." (Busch v. Premier Integrated Med. Assocs., Ltd., 2003 Ohio App. LEXIS 4255 (Montgomery Cty. App., September 5, 2003)(citing Ohio Urology, Inc. v. Poll (1991), 72 Ohio App.3d 446, 452-453, 594 N.E.2d 1027).

We have held that factors to be considered in determining reasonableness of the [non-compete] restrictions a covenant imposes include "
(1) the existence of time and geographic limitations;
(2) whether the employee represents the sole contact with the customer;
(3) whether the employee possesses confidential information or trade secrets;
(4) whether the covenant seeks to eliminate competition which would be unfair to the employer or merely seeks to eliminate ordinary competition;
(5) whether the covenant seeks to stifle the inherent skill and experience of the employee;
(6) whether the benefit to the employer is disproportional to the detriment to the employee;
(7) whether the covenant operates as a bar to the employee's sole means of support;
(8) whether the employee's talent which the employer seeks to restrict was actually developed during the period of employment; and
(9) whether the forbidden employment is merely incidental to the main employment."

I'd guess that non-compete answer for you depends critically on items 1, 2, 5 and 8.

Given that your conference presentation - presumably of original self-generated ideas, displaying your innate talents and skills - leads to this current question, my gut feeling (not a lawyer) is that you are effectively free to pursue contact.

I'd get, and escrow, the severance payments if you can afford to do so. (Though, if you cannot afford to set aside such monies then surely conditionals 6 AND 7 also would apply in addition to the others noted earlier above).

Good luck and hope all works out well.