Author Topic: company requiring me to sign a non-compete  (Read 12274 times)

SimpleCycle

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Re: company requiring me to sign a non-compete
« Reply #50 on: February 10, 2017, 06:59:49 AM »
I have a friend who just lost in court when he was sued by a former employer over a non-compete clause.  The court was very happy to enforce it.  Check with an employment lawyer in your state.

They are certainly not universally unenforceable. However, most states do have limitations on what you can put in a non-compete and when they can be enforced, which is why it is important to get legal advice specific to your particular non-compete and state.

BlueHouse

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Re: company requiring me to sign a non-compete
« Reply #51 on: February 10, 2017, 07:27:38 AM »
This is what I would do (and I've done parts of this in the past)

Step 1.  Act like a team player
Step 2.  Let it sit in your drawer until HR contacts you again.  Then say "oh, yeah, I'm having my lawyer take a look at it"
Step 3.  Wait until you're approached again.  Delay again.  Keep delaying until it's really uncomfortable for your or until there are threats
Step 4.  Disclose that you are looking for a different employment lawyer because your attorney isn't well-versed in employment law.  Ask if they have someone they can recommend. 
Step 5.  Wait....wait..wait...until they start to pressure you on a daily basis.
Step 6.  Tell them your lawyer advised you that this agreement is too broad and that they need to limit the scope in terms of length of time, geographic areas, reasons for leaving the company, scope of products or knowledge that you can work on, etc. 
Step 7.  If they say no...then actually go find a lawyer....or just sign it and hope for the best.

Gondolin

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Re: company requiring me to sign a non-compete
« Reply #52 on: February 10, 2017, 09:41:31 AM »
Quote
This assumes that the corporation representative signs after the modifications have been made.  Typically the parties each initial the changes so there are no claims later that the handwritten modifications were made by one party after the other signed, and the other party therefore did not see and did not agree to those modifications.

This. Contracts are modded all the time. Formally, this usually involves the creation of a new contract document. Mutually signed redlines can be accepted but, unilateral changes in the hopes that the other party won't notice is, at best, extremely dubious.

It'll all be fine until it gets in front of a judge who will interpret the sequence of events as he/she sees fit. Claiming that your redlines opened a tacit negiogtion of terms that put the onus on your employer to review and respond to is.....not likely be accepted. In fact, your employer's attorneys could counter claim that since your employment was contingent on acceptance of ALL company employment agreements WITHOUT revision, you are, in fact, in violation of.....ya ya ya, you see where this is going.

I'm not saying this could never work, just that it's putting an awful lot of faith in a judge to see things your way (which is incidentally, what you're also doing by signing the non-compete in the first place).

actionjackson

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Re: company requiring me to sign a non-compete
« Reply #53 on: February 10, 2017, 10:42:20 AM »
Bottom line is (and I'm not an attorney) your employer would have to be able to substantiate damages from you changing companies.[/b] Courts/arbitrators typically don't look favorably on restricting someone's employment opportunities. Most companies know these things and won't pursue enforcing the contract.

This^

I work in sales in the Chemical industry. I am on a 2 year non-compete. I'm also at a senior enough level that I have had a hand in enforcing non-competes also.

I respect a persons right to work for anyone. What we're trying to prevent is someone coming in, getting to know trade secrets, and/or our major products/customers, and using that for themselves or at another company elsewhere. That happens all the time. Particularly in sales. A person comes in, does 3-4 years with a company, get's to know the customers, builds a relationship with them, and then leaves for a competitor and starts selling the same products to that same customer, for the competition.

I have no issues if an employee goes to sell the same product in a different market, or sells a different product to the same customers.

At least in the sales instance, the way to get around non-competes, is just to not compete. If you work for a competitor, then you can sell a different product line to the same customer, or the same product line, to a different customer base. Best if the new product line wasn't something that your previous company offered - that's not particularly difficult to do in the chemical industry.

I think you will find the law in most instances will require proof of damages. In these cases, we have to show that we lost specific business, with a specific customer.

chesebert

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Re: company requiring me to sign a non-compete
« Reply #54 on: February 10, 2017, 10:58:37 AM »
My DH has been through this one before unfortunately. Not the same line of work though. Most attorney's will tell you NOT to sign a non-compete. But those of us who work in industries that have them know that it's useless to try and get out of them. Which is part of why they are not enforceable.
My DH's previous employer had a one year non-compete. I forget the geographical distance. He left the company, and was honest about where he was going. Long story short, it went all the way to arbitration. We did hire an attorney. The company tried to settle at arbitration (it was just an attempt at a cash grab). My DH told them "I came here to dance". They failed to show the arbitrator damages from my DH moving to the other company and everything was dismissed. We paid $1,200 in legal fees, which we probably could have demanded per the contract for them to pay but our attorney advised against it.
Bottom line is (and I'm not an attorney) your employer would have to be able to substantiate damages from you changing companies.
Courts/arbitrators typically don't look favorably on restricting someone's employment opportunities. Most companies know these things and won't pursue enforcing the contract.
Only $1200 in legal fees??? That's like 2-3 hours of work for many attorneys. Have I gotten my head stuck up my arse? I cannot imagine an arbitration costing less than 100k.

Laserjet3051

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Re: company requiring me to sign a non-compete
« Reply #55 on: February 10, 2017, 11:07:31 AM »
Every company I have left (in CA) had me sign a non-compete that contained very onerous, restrictive language. I signed each and everyone, then moved onto a new job in the same industry. Depending on who is defining "competitor," each of my subsequent jobs could have been construed as breach of agreement. But in no case, did anyone try to come after me. I have been told by many, that these non-compete clauses are totally unenforceable in CA (so long as one does not reveal "trade secrets" or proprietary info). Nobody I know who has gone through similar situation, has been chased down for violating a non-compete. Let these MF'ers try and stop me from working. lol


MayDay

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Re: company requiring me to sign a non-compete
« Reply #56 on: February 10, 2017, 11:09:41 AM »
Every company I have left (in CA) had me sign a non-compete that contained very onerous, restrictive language. I signed each and everyone, then moved onto a new job in the same industry. Depending on who is defining "competitor," each of my subsequent jobs could have been construed as breach of agreement. But in no case, did anyone try to come after me. I have been told by many, that these non-compete clauses are totally unenforceable in CA (so long as one does not reveal "trade secrets" or proprietary info). Nobody I know who has gone through similar situation, has been chased down for violating a non-compete. Let these MF'ers try and stop me from working. lol

CA is known for being unenforceable.  You are in the best possible state!

BeanCounter

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Re: company requiring me to sign a non-compete
« Reply #57 on: February 10, 2017, 11:12:01 AM »
My DH has been through this one before unfortunately. Not the same line of work though. Most attorney's will tell you NOT to sign a non-compete. But those of us who work in industries that have them know that it's useless to try and get out of them. Which is part of why they are not enforceable.
My DH's previous employer had a one year non-compete. I forget the geographical distance. He left the company, and was honest about where he was going. Long story short, it went all the way to arbitration. We did hire an attorney. The company tried to settle at arbitration (it was just an attempt at a cash grab). My DH told them "I came here to dance". They failed to show the arbitrator damages from my DH moving to the other company and everything was dismissed. We paid $1,200 in legal fees, which we probably could have demanded per the contract for them to pay but our attorney advised against it.
Bottom line is (and I'm not an attorney) your employer would have to be able to substantiate damages from you changing companies.
Courts/arbitrators typically don't look favorably on restricting someone's employment opportunities. Most companies know these things and won't pursue enforcing the contract.
Only $1200 in legal fees??? That's like 2-3 hours of work for many attorneys. Have I gotten my head stuck up my arse? I cannot imagine an arbitration costing less than 100k.
Arbitration is in no way that expensive. I guess it may very some depending on the city. The actual arbitrators fees were $750 and that was mandated to be split between the parties. So we paid $375 for his services. The rest of the cost was for our attorney.
I will say that our attorney was a very fair guy who probably billed for the least amount of time he could. We paid for a couple letters to be written to the other attorney to try and get them to stop. Then we paid for him to file a motion to have it moved to arbitration. And we paid for two consultations and some time spent setting up the arbitration.
It seems like a big scary thing, but it was actually comically easy.

caracarn

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Re: company requiring me to sign a non-compete
« Reply #58 on: February 10, 2017, 11:15:23 AM »
Lots of good points here.

My take, is I used to worry about it when I was younger because I was clueless.  Now that I have experience in the work force, I am careful to read them (for example my current one prevents me from working at a specific competitor by name because the owner of that company used to work here and ran off and started a company to directly compete with us decades ago and our owner was upset about it, but I had no desire to go there etc. so it was a non-issue).

The non-compete is there to keep you from doing substantial damage and I would believe is very rarely pursued.  If you come in then move and take their top 10 customers to a direct competitor, yes, they will come after you.  If you just decide you are going to take another job and just go there and do your job and do not steal business from them and just focus on working with the new customers you have and getting some new ones, there is usually no concern over that.  That said, you could work for a vindictive organization that just like to fight, but if it's a large public corporation that's pretty rare.  I mean, do you not think companies like Oracle or whatever have non-competes?  Their execs move to other tech companies all the time, directly, and I am pretty sure they are not getting sued for violating their non-compete.  That's because they take the new job and work on making their company better without resorting to using anything directly from the old employer. 

chesebert

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Re: company requiring me to sign a non-compete
« Reply #59 on: February 10, 2017, 11:25:43 AM »
My DH has been through this one before unfortunately. Not the same line of work though. Most attorney's will tell you NOT to sign a non-compete. But those of us who work in industries that have them know that it's useless to try and get out of them. Which is part of why they are not enforceable.
My DH's previous employer had a one year non-compete. I forget the geographical distance. He left the company, and was honest about where he was going. Long story short, it went all the way to arbitration. We did hire an attorney. The company tried to settle at arbitration (it was just an attempt at a cash grab). My DH told them "I came here to dance". They failed to show the arbitrator damages from my DH moving to the other company and everything was dismissed. We paid $1,200 in legal fees, which we probably could have demanded per the contract for them to pay but our attorney advised against it.
Bottom line is (and I'm not an attorney) your employer would have to be able to substantiate damages from you changing companies.
Courts/arbitrators typically don't look favorably on restricting someone's employment opportunities. Most companies know these things and won't pursue enforcing the contract.
Only $1200 in legal fees??? That's like 2-3 hours of work for many attorneys. Have I gotten my head stuck up my arse? I cannot imagine an arbitration costing less than 100k.
Arbitration is in no way that expensive. I guess it may very some depending on the city. The actual arbitrators fees were $750 and that was mandated to be split between the parties. So we paid $375 for his services. The rest of the cost was for our attorney.
I will say that our attorney was a very fair guy who probably billed for the least amount of time he could. We paid for a couple letters to be written to the other attorney to try and get them to stop. Then we paid for him to file a motion to have it moved to arbitration. And we paid for two consultations and some time spent setting up the arbitration.
It seems like a big scary thing, but it was actually comically easy.
How did you find your attorney? online? a friend of yours?

BeanCounter

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Re: company requiring me to sign a non-compete
« Reply #60 on: February 10, 2017, 11:28:58 AM »
My DH has been through this one before unfortunately. Not the same line of work though. Most attorney's will tell you NOT to sign a non-compete. But those of us who work in industries that have them know that it's useless to try and get out of them. Which is part of why they are not enforceable.
My DH's previous employer had a one year non-compete. I forget the geographical distance. He left the company, and was honest about where he was going. Long story short, it went all the way to arbitration. We did hire an attorney. The company tried to settle at arbitration (it was just an attempt at a cash grab). My DH told them "I came here to dance". They failed to show the arbitrator damages from my DH moving to the other company and everything was dismissed. We paid $1,200 in legal fees, which we probably could have demanded per the contract for them to pay but our attorney advised against it.
Bottom line is (and I'm not an attorney) your employer would have to be able to substantiate damages from you changing companies.
Courts/arbitrators typically don't look favorably on restricting someone's employment opportunities. Most companies know these things and won't pursue enforcing the contract.
Only $1200 in legal fees??? That's like 2-3 hours of work for many attorneys. Have I gotten my head stuck up my arse? I cannot imagine an arbitration costing less than 100k.
Arbitration is in no way that expensive. I guess it may very some depending on the city. The actual arbitrators fees were $750 and that was mandated to be split between the parties. So we paid $375 for his services. The rest of the cost was for our attorney.
I will say that our attorney was a very fair guy who probably billed for the least amount of time he could. We paid for a couple letters to be written to the other attorney to try and get them to stop. Then we paid for him to file a motion to have it moved to arbitration. And we paid for two consultations and some time spent setting up the arbitration.
It seems like a big scary thing, but it was actually comically easy.
How did you find your attorney? online? a friend of yours?
Recommendation of someone who left the same company and they tried to pull the same shit. Attorney had seen a couple employment suits with the company and didn't like them so he wanted to help. But he still billed $250 an hour. It just doesn't take that much work.

chesebert

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Re: company requiring me to sign a non-compete
« Reply #61 on: February 10, 2017, 01:16:57 PM »
My DH has been through this one before unfortunately. Not the same line of work though. Most attorney's will tell you NOT to sign a non-compete. But those of us who work in industries that have them know that it's useless to try and get out of them. Which is part of why they are not enforceable.
My DH's previous employer had a one year non-compete. I forget the geographical distance. He left the company, and was honest about where he was going. Long story short, it went all the way to arbitration. We did hire an attorney. The company tried to settle at arbitration (it was just an attempt at a cash grab). My DH told them "I came here to dance". They failed to show the arbitrator damages from my DH moving to the other company and everything was dismissed. We paid $1,200 in legal fees, which we probably could have demanded per the contract for them to pay but our attorney advised against it.
Bottom line is (and I'm not an attorney) your employer would have to be able to substantiate damages from you changing companies.
Courts/arbitrators typically don't look favorably on restricting someone's employment opportunities. Most companies know these things and won't pursue enforcing the contract.
Only $1200 in legal fees??? That's like 2-3 hours of work for many attorneys. Have I gotten my head stuck up my arse? I cannot imagine an arbitration costing less than 100k.
Arbitration is in no way that expensive. I guess it may very some depending on the city. The actual arbitrators fees were $750 and that was mandated to be split between the parties. So we paid $375 for his services. The rest of the cost was for our attorney.
I will say that our attorney was a very fair guy who probably billed for the least amount of time he could. We paid for a couple letters to be written to the other attorney to try and get them to stop. Then we paid for him to file a motion to have it moved to arbitration. And we paid for two consultations and some time spent setting up the arbitration.
It seems like a big scary thing, but it was actually comically easy.
How did you find your attorney? online? a friend of yours?
Recommendation of someone who left the same company and they tried to pull the same shit. Attorney had seen a couple employment suits with the company and didn't like them so he wanted to help. But he still billed $250 an hour. It just doesn't take that much work.
A combination of cheap billing rate and efficiency - probably just recycled the suff used for your coworker. Nice find!

Malum Prohibitum

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Re: company requiring me to sign a non-compete
« Reply #62 on: February 10, 2017, 02:57:05 PM »
he still billed $250 an hour. It just doesn't take that much work.
  This must be some set of circumstances unique to your particular agreement.  Did the other side have a lawyer?  Typically the discovery alone would have run many times that (all of which happens before the arbitration hearing).  Also, the agreements are usually not arbitrable, because the company requesting you to sign it wants to be able to go to court for injunctive relief, that is, a court order enjoining you from violating the order.  They do not need to show any damages to do that.  The company would also go after the new employer for tortious interference with contract, and bury them with discovery relating to the projects and jobs and customers on which the employee is working.  The new employer would not be a party to an arbitration agreement.  It would cost more than $1200 to answer the complaint.

There is something very off about your story, or maybe your husband's former employer just does not have its act together.  I do not doubt what you are telling us, but there is some very strange circumstance missing that must explain it.  Either they did not have an attorney, their attorney did not know what he was doing, it was a crappy agreement not worth the paper on which it was written, or you live in a state that treats noncompetes very harshly.
« Last Edit: February 10, 2017, 02:58:38 PM by Malum Prohibitum »

Paul der Krake

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Re: company requiring me to sign a non-compete
« Reply #63 on: February 10, 2017, 03:08:09 PM »
I would just delay for the principle- and then sign it when you have no choice.

I have signed my share of non-competes and from what I've understood talking to managers, they are enforced only if you do bleeding edge work on new product X, then turn around and go build something extremely similar for the competition, taking all the cool ideas with you. I have never heard of something like that used against your run-of-the-mill dev. Companies have better things than spend tens of thousands against ex-colleagues unless you are doing some egregious damage that would be extremely obvious to everyone.

It's shitty that these things exist, but probably not worth fighting tooth and nail over.

chesebert

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Re: company requiring me to sign a non-compete
« Reply #64 on: February 10, 2017, 03:41:11 PM »
he still billed $250 an hour. It just doesn't take that much work.
  This must be some set of circumstances unique to your particular agreement.  Did the other side have a lawyer?  Typically the discovery alone would have run many times that (all of which happens before the arbitration hearing).  Also, the agreements are usually not arbitrable, because the company requesting you to sign it wants to be able to go to court for injunctive relief, that is, a court order enjoining you from violating the order.  They do not need to show any damages to do that.  The company would also go after the new employer for tortious interference with contract, and bury them with discovery relating to the projects and jobs and customers on which the employee is working.  The new employer would not be a party to an arbitration agreement.  It would cost more than $1200 to answer the complaint.

There is something very off about your story, or maybe your husband's former employer just does not have its act together.  I do not doubt what you are telling us, but there is some very strange circumstance missing that must explain it.  Either they did not have an attorney, their attorney did not know what he was doing, it was a crappy agreement not worth the paper on which it was written, or you live in a state that treats noncompetes very harshly.
Now, we are talking! I recall someone once quoted me $500k to take a contract dispute through arbitration with discovery and everything - I nearly fell out of my chair. He also said it costs $1.5M+ to take a case to Supreme Court so arbitration is really a bargain! hahaha....

PizzaSteve

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Re: company requiring me to sign a non-compete
« Reply #65 on: February 10, 2017, 05:26:57 PM »
Is this a condition of being hired, or something that they just sprung on you as a long-term employee?

I'd probably bluntly say "No". If they're that worried about you working for a competitor, it sounds like you have nothing to worry about, job-wise, so you should (in theory) have plenty of leverage here.

-W

Acquisition.


Seems that the ' i was forced to sign this under duress (to keep my job),  so this contract is null and unenforceable (no consideration) would be an open avenue gor defense to consider, since you were acquired, on top if normal defenses (like no damages).  I am not a legal council, but this seems to be an intimidation strategy vs a real legally binding contract.
« Last Edit: February 10, 2017, 05:30:53 PM by PizzaSteve »

Malum Prohibitum

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Re: company requiring me to sign a non-compete
« Reply #66 on: February 13, 2017, 08:46:19 AM »
Is this a condition of being hired, or something that they just sprung on you as a long-term employee?

I'd probably bluntly say "No". If they're that worried about you working for a competitor, it sounds like you have nothing to worry about, job-wise, so you should (in theory) have plenty of leverage here.

-W
 

Acquisition.


Seems that the ' i was forced to sign this under duress (to keep my job),  so this contract is null and unenforceable (no consideration) would be an open avenue gor defense to consider, since you were acquired, on top if normal defenses (like no damages).  I am not a legal council, but this seems to be an intimidation strategy vs a real legally binding contract.
Unfortunately, that is a loser argument in every state where I have researched it.  The law says continued employment is adequate consideration.

BeanCounter

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Re: company requiring me to sign a non-compete
« Reply #67 on: February 13, 2017, 09:40:36 AM »
he still billed $250 an hour. It just doesn't take that much work.
  This must be some set of circumstances unique to your particular agreement.  Did the other side have a lawyer?  Typically the discovery alone would have run many times that (all of which happens before the arbitration hearing).  Also, the agreements are usually not arbitrable, because the company requesting you to sign it wants to be able to go to court for injunctive relief, that is, a court order enjoining you from violating the order.  They do not need to show any damages to do that.  The company would also go after the new employer for tortious interference with contract, and bury them with discovery relating to the projects and jobs and customers on which the employee is working.  The new employer would not be a party to an arbitration agreement.  It would cost more than $1200 to answer the complaint.

There is something very off about your story, or maybe your husband's former employer just does not have its act together.  I do not doubt what you are telling us, but there is some very strange circumstance missing that must explain it.  Either they did not have an attorney, their attorney did not know what he was doing, it was a crappy agreement not worth the paper on which it was written, or you live in a state that treats noncompetes very harshly.
Perhaps our story is unique. I think the piece of information your missing is the industry. Let's just say it's "talent" based. Which could explain why a lot of discovery wasn't necessary.
I believe his former employer did not have their act together and liked to kick around talent and make attempts at cash grabs. But that's just my opinion.
I bring our story up because I think it really depends on your position in a company, where you move next, your state, etc. But I wouldn't just tell people that you should never sign a non-compete or just find somewhere else to work. That's just not possible in many industries. When we were fighting DH's we had other attorney's tell us "just pay what they want because litigation will be so expensive and go on forever". And that could of scared us into paying a $32k bill that we didn't owe.
I'm sure that there are cases where the non-competes are absolutely enforceable, and would be pursued and therefore would be expensive to defend. But I would hope that they are in the minority, limited to cases where the employee is an executive with trade secrets or taking customers with them etc. That simply wasn't the case with my DH.