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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Case on February 09, 2017, 10:56:09 AM
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My employer, a major chemical company, is requiring me to sign a non-compete that prohibits me for working for competitors for 2 years after the termination of my employment. If I sign this, this will effectively bar me from working if/when I leave the company, because my company is huge and has products all over the market; everyone is a competitor, unless I change professions.
What do I do?
I've read about options I can try, such as not signing, or requesting they give me a large severance package in the event that I leave to cover the period which I would not be able to work.
However, I'm not optimistic that they will budge. It feels unbelievably unfair for a company to have that much control over you; they could fire you and you couldn't work for a competitor. And in my profession, if you have large gaps in employment, it is very hard to get back in with other companies.
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I can't tell if you were just hired and this is part of the standard paperwork, or if you've been working there a long a time and they are just now requiring the non-compete form. If you've been working there a long time, maybe they will be willing to raise your salary due to this new requirement.
You could have a lawyer review the document to see if it's even enforceable. There may be geographical limits to the non-compete. If you leave for another employer, they may be willing to pay your current company to transfer the non-compete, then you wouldn't need to leave your field. I can't imagine they would fire you and then enforce the non-compete, unless you did something like take all their customers away.
Your company should have a legitimate business interest over and above ordinary competition, like trade secrets, valuable confidential business or professional information, substantial relationships with specific customers, goodwill associated with an ongoing business, or specialized training.
I would fight for 2 year's severance pay for firing without cause if they're going to hold you to the non-compete.
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ChemE here.
You'll have to sign one anywhere. Good luck getting a huge company to agree to a big severance or a change in the contract. Maybe I'm wrong but none of our employees would budge on that.
Not a lawyer but my H has done some research. Most are unenforceable (depends on the state). If you get fired/laid off they can't prevent you from earning a living.
Area of concern for us is that if H voluntarily left his company for a competitor they might be able to enforce. Probably only for a direct competitor. Bummer since one competitor is headquartered in a city we would like to move to!
Probably no enforcement if you go to a non-direct competitor.
I am totally unconcerned about my employer as they are tiny and not vindictive. They wouldn't waste money on a lawyer to fight me.
All of my opinions are informed by Google, YMMV.
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I concur with the above. Pretty standard for an engineering job, but is very hard to enforce.
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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
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Area of concern for us is that if H voluntarily left his company for a competitor they might be able to enforce. Probably only for a direct competitor. Bummer since one competitor is headquartered in a city we would like to move to!
I understand they are usually unenforceable outside of your company's own geographical area. I think "I would have continued working for you, but you have no presence in this new city" is a valid reason to voluntarily leave for a competitor. Especially if the job change is preceded by a request to work from home in the new city.
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What do I do?
No one knows but you. You feel it is unfair, but are you able/willing to stand up for what you believe in?
I could go into a long tirade about right-to-work and at-will employment and how HR is meant to serve employers not employees, but all those ideological positions often get trumped by financial reality. This all comes down to how much you believe in this and what you are willing to risk for it. My advice for anyone coming to this thread is get your financial life in order so you don't have to put up with this bullshit. Until then, you might just have to suck it up and play by the man's rules.
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On the one hand it seems unreasonable to not allow someone in a specialized field to work for a competitor after leaving the company, but in engineering I can see why that company wouldn't want an engineer they've paid for years, likely working on very valuable projects in the development stage, to just up and leave for a competitor with all that recent knowledge of what the company is pursuing.
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I recently had my non-compete reviewed by a lawyer.
I don't know what state you're in, but in PA it needs to be reasonable in duration and geographic area. He said he would never advise more than 2 years and about 20 or 30 miles. Anything beyond that becomes difficult to enforce.
Your state may vary.
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ChemE here.
You'll have to sign one anywhere. Good luck getting a huge company to agree to a big severance or a change in the contract. Maybe I'm wrong but none of our employees would budge on that.
Not a lawyer but my H has done some research. Most are unenforceable (depends on the state). If you get fired/laid off they can't prevent you from earning a living.
Area of concern for us is that if H voluntarily left his company for a competitor they might be able to enforce. Probably only for a direct competitor. Bummer since one competitor is headquartered in a city we would like to move to!
Probably no enforcement if you go to a non-direct competitor.
I am totally unconcerned about my employer as they are tiny and not vindictive. They wouldn't waste money on a lawyer to fight me.
All of my opinions are informed by Google, YMMV.
I generally figured so much in terms of them not budging, but worth a try!
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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.
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What do I do?
No one knows but you. You feel it is unfair, but are you able/willing to stand up for what you believe in?
I could go into a long tirade about right-to-work and at-will employment and how HR is meant to serve employers not employees, but all those ideological positions often get trumped by financial reality. This all comes down to how much you believe in this and what you are willing to risk for it. My advice for anyone coming to this thread is get your financial life in order so you don't have to put up with this bullshit. Until then, you might just have to suck it up and play by the man's rules.
Will I stand up for what I believe in? Yes, but to a point. I wont give up my job for it. Too complicated (wife and I work for same company).
And yes, on the way towards FIRE for a reason.
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On the one hand it seems unreasonable to not allow someone in a specialized field to work for a competitor after leaving the company, but in engineering I can see why that company wouldn't want an engineer they've paid for years, likely working on very valuable projects in the development stage, to just up and leave for a competitor with all that recent knowledge of what the company is pursuing.
Yes, I understand the rationale, but it goes too far. It could be interpreted as preventing me from working in my profession ANYWHERE for 2 years following termination. Because this company has all types of products and competitors everywhere. I understand this is the norm, etc... but it encroaches well beyond some basic rights.
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I recently had my non-compete reviewed by a lawyer.
I don't know what state you're in, but in PA it needs to be reasonable in duration and geographic area. He said he would never advise more than 2 years and about 20 or 30 miles. Anything beyond that becomes difficult to enforce.
Your state may vary.
This non-compete specifies 2 years following termination, world-wide; no joke.
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I recently had my non-compete reviewed by a lawyer.
I don't know what state you're in, but in PA it needs to be reasonable in duration and geographic area. He said he would never advise more than 2 years and about 20 or 30 miles. Anything beyond that becomes difficult to enforce.
Your state may vary.
This non-compete specifies 2 years following termination, world-wide; no joke.
Sounds way too broad to be enforced.
If you refuse to sign I wonder what they'll do. I wonder if you can encourage them to "lose" yours in the acquisition process. Oh, I already signed it! Or in the chaos of getting thousands signed, would they notice if you crossed out terms and made changes?
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This non-compete specifies 2 years following termination, world-wide; no joke.
Talk to an attorney that specializes in this. They can advise you how much of this is enforceable.
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I recently had my non-compete reviewed by a lawyer.
I don't know what state you're in, but in PA it needs to be reasonable in duration and geographic area. He said he would never advise more than 2 years and about 20 or 30 miles. Anything beyond that becomes difficult to enforce.
Your state may vary.
This non-compete specifies 2 years following termination, world-wide; no joke.
Talk to an employment lawyer, but honestly, the broader the terms the less likely the company is able to enforce the agreement. My state has pretty clear case law making many of these agreements unenforceable.
In order for any of this to matter, you would have to leave your job for a competitor and the company would have to bring a lawsuit against you for violating the agreement. Then the court would have to find that the contract is enforceable by the employer, which in most states requires that it is reasonable in scope. Writing it very broadly to exclude nearly all employment is very unlikely to be enforceable.
To me this is an EASY decision to spend $200-$500 getting legal review to protect your future earning potential.
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On the one hand it seems unreasonable to not allow someone in a specialized field to work for a competitor after leaving the company, but in engineering I can see why that company wouldn't want an engineer they've paid for years, likely working on very valuable projects in the development stage, to just up and leave for a competitor with all that recent knowledge of what the company is pursuing.
Yes, I understand the rationale, but it goes too far. It could be interpreted as preventing me from working in my profession ANYWHERE for 2 years following termination. Because this company has all types of products and competitors everywhere. I understand this is the norm, etc... but it encroaches well beyond some basic rights.
Like everyone else is saying, this is way too broad to be enforceable.
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Check your state laws. Non-competes are not enforceable in CA.
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Check your state laws. Non-competes are not enforceable in CA.
This is very important advice. I am an attorney. I have dealt with many of these, and I have dealt with them not just on the front end, when people are considering them (most people just sign them without regard to the consequences) but on the back end, when people are violating them.
Some states enforce them.
Some states even REWRITE unenforceable provisions to make them enforceable. That's correct. You did not read my writing incorrectly. You have an unenforceable agreement, you leave to work for a competitor, and, when your old employer takes you to court, the court will rewrite the agreement to make it enforceable.
Even in states where it is not enforceable, or perhaps certain provisions are not enforceable, your new employer is not going to be happy about being sued for injunctive relief.
Either do not sign it, or get something that makes it damn well worth it. I could tell you stories that would make you cry.
They can downsize, fire you, and still enforce it to keep you from working for competitors.
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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.
Acquisition. I don't suppose you can get everybody to refuse to sign? Would they cut the whole lot of you loose? If so, at least you are free to go elsewhere, or maybe you can all start your own engineering firm.
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What happens if you just ignore the agreement after you quit?
How are they going to know where you're working, and what kind of team of people do they have looking to enforce this agreement?
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What happens if you just ignore the agreement after you quit?
How are they going to know where you're working, and what kind of team of people do they have looking to enforce this agreement?
You place your new employer in the position of getting sued. In some industries, it's a small world.
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Someone I know took a job with a competitor. To be safe, he did not tell current employer where he was going. He did not update LinkedIn until after the period ended. I don't think the employer would have prevented this anyways but he was playing it safe.
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Someone I know took a job with a competitor. To be safe, he did not tell current employer where he was going. He did not update LinkedIn until after the period ended. I don't think the employer would have prevented this anyways but he was playing it safe.
Umm this is not cool. If I were in a situation where I'd signed a non-compete and I were being recruited, I'd disclose the terms of the non-compete and try to make sure that they'd assume all the risk of hiring me.
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Someone I know took a job with a competitor. To be safe, he did not tell current employer where he was going. He did not update LinkedIn until after the period ended. I don't think the employer would have prevented this anyways but he was playing it safe.
Umm this is not cool. If I were in a situation where I'd signed a non-compete and I were being recruited, I'd disclose the terms of the non-compete and try to make sure that they'd assume all the risk of hiring me.
Well, no part of what brian wrote said he did not tell the new company he had signed non-compete. Just that he didn't tell his old company where he was going.
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However, I'm not optimistic that they will budge. It feels unbelievably unfair for a company to have that much control over you; they could fire you and you couldn't work for a competitor. And in my profession, if you have large gaps in employment, it is very hard to get back in with other companies.
Then do not work there. Give them the finger and find a different job. I would not work at a place that tries to trap you into working forever.
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Someone I know took a job with a competitor. To be safe, he did not tell current employer where he was going. He did not update LinkedIn until after the period ended. I don't think the employer would have prevented this anyways but he was playing it safe.
Umm this is not cool. If I were in a situation where I'd signed a non-compete and I were being recruited, I'd disclose the terms of the non-compete and try to make sure that they'd assume all the risk of hiring me.
Well, no part of what brian wrote said he did not tell the new company he had signed non-compete. Just that he didn't tell his old company where he was going.
This seems to be the norm. Don't tell old company where you are going, hope they don't poke around. Of course you tell the new company.
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What happens if you just ignore the agreement after you quit?
How are they going to know where you're working, and what kind of team of people do they have looking to enforce this agreement?
From the sales world:
Usually a cease and desist letter or 2. And then nothing. Unless you really go after clients or bad mouth someone. Then they might sue.
And most of the firms pay to defend their new employee.
So. Leave, get a new job. Lay low, ignore cease and desists. Sometimes it all goes away. Sometimes not.
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My employer, a major chemical company, is requiring me to sign a non-compete that prohibits me for working for competitors for 2 years after the termination of my employment. If I sign this, this will effectively bar me from working if/when I leave the company, because my company is huge and has products all over the market; everyone is a competitor, unless I change professions.
What do I do?
I've read about options I can try, such as not signing, or requesting they give me a large severance package in the event that I leave to cover the period which I would not be able to work.
However, I'm not optimistic that they will budge. It feels unbelievably unfair for a company to have that much control over you; they could fire you and you couldn't work for a competitor. And in my profession, if you have large gaps in employment, it is very hard to get back in with other companies.
In my experience, people who work in industries where non-competes are standard, companies understand a resume gap from sitting out a non-compete. My wife works in such an industry, and encounters it quite often. However, it is also standard in her industry to have severance tied to the non-compete.
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Does the non-compete still apply if they fire you?
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There are reasons for employers to require non competes. I've had employees quit an be a real pain trying to steal clients over to their new employer. We now require non competes and have pushed the issue one time which caused the guy to lose his new job. Some say they aren't enforceable but a big company can make your life pretty miserable and cost you some money in these circumstances. If you don't like their terms work somewhere else.
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My experience has been the non compete being tied into accepting RSU's, profit shares or severance packages. We will trade you a carrot for a stick. While I have seen most of them go unenforced, if you suddenly show up as being amazing successful at your new job working with clients that were groomed on their time and dime, they do come charging after you...sometimes just because ego of sales management gets involved.
I am from the "not worth dying on this particular hill" club.
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If its a big company, they may not know how to deal with you having a little proper, well, civil disobedience. I've had some luck redlining out all of the objectionable terms, initialing my redlines, and signing. They never did anything because, I had signed the form, the low level HR person couldn't counter sign with my mark ups, they didn't have a budget for legal review of my marks, may not have immediately brought the problem to their supervisors attention so it may have been easier to not deal with it. But, I did sign it so I wasn't on the list of people who hadn't signed. I absolutely think a non-disclosure agreement is a reasonably thing to have to abide by, but that is a separate animal.
YMMV
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I've had some luck redlining out all of the objectionable terms, initialing my redlines, and signing.
This is the equivalent of putting one of those "Facebook does not have a right to use my info" statements in your profile. No court is going to accept your unilateral edits as valid and, in fact, the agreement itself no doubt states explicitly under what circumstances any changes to the agreement can be made after both parties sign.
You might be able to get by an HR flunky who doesn't much care this way but, you have still signed the document. In the unlikely event that your employer attempts to enforce it, it is not likely that the judge will care about your 'redlines'.
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I've had some luck redlining out all of the objectionable terms, initialing my redlines, and signing.
This is the equivalent of putting one of those "Facebook does not have a right to use my info" statements in your profile. No court is going to accept your unilateral edits as valid and, in fact, the agreement itself no doubt states explicitly under what circumstances any changes to the agreement can be made after both parties sign.
You might be able to get by an HR flunky who doesn't much care this way but, you have still signed the document. In the unlikely event that your employer attempts to enforce it, it is not likely that the judge will care about your 'redlines'.
The document he signed has been altered. Modifications to contracts happen all the time. The contract is not legally binding until both parties agree to and sign it. (Likely this is the loophole that TWM is hoping to exploit . . . the HR person just knows that the document needs to be signed - it was signed, box can be ticked off.) I'd be surprised if a judge failed to consider the modifications to the contract made before signing it in a case, it would be on the company to respond with a modified contract or require an unaltered contract to be signed.
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I've had some luck redlining out all of the objectionable terms, initialing my redlines, and signing.
This is the equivalent of putting one of those "Facebook does not have a right to use my info" statements in your profile. No court is going to accept your unilateral edits as valid and, in fact, the agreement itself no doubt states explicitly under what circumstances any changes to the agreement can be made after both parties sign.
You might be able to get by an HR flunky who doesn't much care this way but, you have still signed the document. In the unlikely event that your employer attempts to enforce it, it is not likely that the judge will care about your 'redlines'.
I'm curious here. (and I'm definitely not saying this redlining trick is my preferred method of negotiating contracts). If someone modifies a document, and initials and dates it , they've made it pretty clear they have modified it. (hence redline, I really did use red ink/not trying to hide anything) I've also seen people make a note under their signature saying there are modifications. The modifications were made *before* I signed and before the company would have signed, if they ever did. These are not modifications after the agreement was signed by the company or me. Can a good (expensive) lawyer get the originally typed text to stick as the agreement?
I've also done this were I got the word document, deleted everything I don't like and then sent it in signed. presumably there is no issue there.
This is absolutely a fly under the radar / bet on corporate incompetency strategy employed by a guy in California where the non compete probably wasn't enforceable anyways.
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Does the non-compete still apply if they fire you?
Typically, yes. I do not recall seeing one where this was not the case. Obviously, if that were not the case, then the employee could just start doing things to get fired and invalidate the noncompete.
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These are unenforceable for all except maybe executives that have golden parachutes anyways.
Wow, please stick to your day job and try not to practice law. This is very bad advice.
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I've had some luck redlining out all of the objectionable terms, initialing my redlines, and signing.
This is the equivalent of putting one of those "Facebook does not have a right to use my info" statements in your profile. No court is going to accept your unilateral edits as valid and, in fact, the agreement itself no doubt states explicitly under what circumstances any changes to the agreement can be made after both parties sign.
You might be able to get by an HR flunky who doesn't much care this way but, you have still signed the document. In the unlikely event that your employer attempts to enforce it, it is not likely that the judge will care about your 'redlines'.
I'm curious here. (and I'm definitely not saying this redlining trick is my preferred method of negotiating contracts). If someone modifies a document, and initials and dates it , they've made it pretty clear they have modified it. (hence redline, I really did use red ink/not trying to hide anything) I've also seen people make a note under their signature saying there are modifications. The modifications were made *before* I signed and before the company would have signed, if they ever did. These are not modifications after the agreement was signed by the company or me. Can a good (expensive) lawyer get the originally typed text to stick as the agreement?
I've also done this were I got the word document, deleted everything I don't like and then sent it in signed. presumably there is no issue there.
This is absolutely a fly under the radar / bet on corporate incompetency strategy employed by a guy in California where the non compete probably wasn't enforceable anyways.
Typically handwritten provisions control over typed provisions. 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.
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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.
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I recall a thread in this forum about someone's former employer who went after them to recoup training costs that were recoverable if the person left the company within a certain timeframe. Personally, I would not under any circumstances trust that the company won't enforce, or attempt to enforce, the non-compete. They have deeper pockets than you do. If they can go after you for something, they will. DTA.
Edit: found it
http://forum.mrmoneymustache.com/ask-a-mustachian/former-employer-billing-me-per-tuition-assistance/
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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.
Acquisition. I don't suppose you can get everybody to refuse to sign? Would they cut the whole lot of you loose? If so, at least you are free to go elsewhere, or maybe you can all start your own engineering firm.
Appreciate the feedback.
Probably can't get many people to stand firm, but maybe could get a small handful to complain a lot.
In the end, I need the money and it is hard for me to find a new job because I my wife works at the company too. But I will at least try to get something out of it.
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However, I'm not optimistic that they will budge. It feels unbelievably unfair for a company to have that much control over you; they could fire you and you couldn't work for a competitor. And in my profession, if you have large gaps in employment, it is very hard to get back in with other companies.
Then do not work there. Give them the finger and find a different job. I would not work at a place that tries to trap you into working forever.
I just may start a job search this weekend....
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Does the non-compete still apply if they fire you?
Yes.
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On the one hand it seems unreasonable to not allow someone in a specialized field to work for a competitor after leaving the company, but in engineering I can see why that company wouldn't want an engineer they've paid for years, likely working on very valuable projects in the development stage, to just up and leave for a competitor with all that recent knowledge of what the company is pursuing.
Yes, I understand the rationale, but it goes too far. It could be interpreted as preventing me from working in my profession ANYWHERE for 2 years following termination. Because this company has all types of products and competitors everywhere. I understand this is the norm, etc... but it encroaches well beyond some basic rights.
I would ask them to write in the specific names of the competitors from which you are barred for 2 years. And ensure it is less than 5 (or fewer) names. Senior personnel being hired often can modify these slightly, so maybe if you have enough heft, you can too.
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I worked for a small chemical company that was acquired by a giant multinational chem company a few years ago. I also resisted a 2-year non compete. I eventually managed to negotiate a non-compete for 21 months in return for 6 months salary if I leave the company.
While I am not USA based, our company is global.
Cannot overstress the importance of getting competent local legal advice.
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I'm late to the party on this.
The enforcement of these depends on the industry you work in. As others have commented, it may be pretty ironclad in the chemical business because of proprietary information.
In my field of finance, a non-solicitation agreement holds up, but a non-compete does not. They are difficult to enforce because it eliminates the ability to make a living.
In the medical field, it tends to be a geographic restriction and they hold up.
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Someone I know took a job with a competitor. To be safe, he did not tell current employer where he was going. He did not update LinkedIn until after the period ended. I don't think the employer would have prevented this anyways but he was playing it safe.
Umm this is not cool. If I were in a situation where I'd signed a non-compete and I were being recruited, I'd disclose the terms of the non-compete and try to make sure that they'd assume all the risk of hiring me.
Well, no part of what brian wrote said he did not tell the new company he had signed non-compete. Just that he didn't tell his old company where he was going.
This seems to be the norm. Don't tell old company where you are going, hope they don't poke around. Of course you tell the new company.
This wasn't me so I don't know if he told the other company or not. I'm a software engineer and there are plenty of jobs so there's no need to go to work for a direct competitor. When that other guy left the company I was at back then, I thought it was unusual that he wouldn't tell anyone where he was going his last two weeks. The company we were working for really would not have cared in my opinion.
I had another issue recently where everything was disclosed. Microsoft hired one of our salespeople. We were a Microsoft Partner. He disclosed to both sides. His job offer almost fell through but in the end they worked it out that he couldn't call a specific list of clients for six months. The contract said a year but they negotiated. Microsoft sent them a lot of business so even though they were pissed that MS took their salesman, they wanted to keep the relationship good.
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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.
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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.
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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.
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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).
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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.
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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.
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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
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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!
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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.
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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.
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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?
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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.
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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!
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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.
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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.
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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....
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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.
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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.
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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.