Does a no-complete clause hold up?

[Turock]

Originally Posted by guy n. cognito

Don't be naive.

These types of non competes are becoming more and more common, and they are being forced upon employees that have no management role and hold no company secrets. We can pretend they are voluntary, but tell someone that needs a job that they can either sign it or leave, and see how voluntary it feels. In many cases, these documents aren't legally enforceable, but the employer intends to use it more inhibit someone from leaving than they do to protect trade secrets.

In some cases I've experienced, employers require existing employee to sign one as a condition of continued employment. It's illegal in most states, but they get away with it.

Sorry, I didn't realize that it is now considered "naive" to keep one's word. Maybe I'm just old.

[guy n. cognito]

Originally Posted by Turock

Sorry, I didn't realize that it is now considered "naive" to keep one's word. Maybe I'm just old.

Keeping one's word to your spouse, kids, or friends is a noble thing. "Keeping ones word" to a corporate entity that would cut you in a second if they thought it would add half a penny to EPS is, IMHO, naive.

[Sequimite]

Covered pretty thoroughly but the most obvious case hasn't been mentioned: salesmen. Most non-compete clauses are meant to keep you from taking a bunch of customers to your next job. I'm a CPA and the comment about accountants being particularly subject to non-compete clauses is not true - EXCEPT in CPA firms where the issue is taking customers to a different CPA firm.

add> I'm retired and outside salesmen are in decline. So at this time other issues may have supplanted customer loss as the most common reason for non-competes.

[AaronMB]

Originally Posted by Handyman

Where do you live? This is very much a function of state law. In California, for example, non-compete agreements are unenforceable. In many other states, they are.

Right! It's best to check into it locally.

[tekdiver500ft]

Does it hold up? Generally yes, even in California. Why? It is a legally binding contract that YOU signed, without coercion. Darned near anything reasonable is enforceable if contractually agreed upon. If you didn't want to agree to it, you could have had the clause changed or removed, or chosen not to sign it.

It was your choice to agree to it, so you should keep your word, regardless of whether or not the company can or would try to enforce the clause.

[guy n. cognito]

Originally Posted by tekdiver500ft

Does it hold up? Generally yes, even in California. Why? It is a legally binding contract that YOU signed, without coercion. Darned near anything reasonable is enforceable if contractually agreed upon. If you didn't want to agree to it, you could have had the clause changed or removed, or chosen not to sign it.

It was your choice to agree to it, so you should keep your word, regardless of whether or not the company can or would try to enforce the clause.

This just isn't true. Contract, or clauses within contract, are ruled legally unenforceable all the time, even if both parties agreed to them.

[grendle]

Basically they cannot stop you from making a living, but, you cannot take company info with you when you leave ie. Customer info, contact lists, company data bases. Other than that your ok. Be smart, lay low for 6-8 mo. At your new place, don't recruit your old friends, and don't take info from your old job and you'll be fine, after the contract runs out you can do what you want. Make a clean break and start fresh at your new place and you should be fine.

[grendle]

From my experience working across the country and owning my own company, non competes are generally unenforceable. Your old company has to be able to show that you caused them monetary damage by taking their trade secrets with you and using them to hurt their business at your new place of employment. Other than at the CEO level, I have not heard of one ever being enforced. It has been proven in court however that your old company cannot stop you from making a living in your given profession.

[AaronMB]

Originally Posted by guy n. cognito

This just isn't true. Contract, or clauses within contract, are ruled legally unenforceable all the time, even if both parties agreed to them.

A pound of flesh!

[guy n. cognito]

Originally Posted by AaronMB

A pound of flesh!

Just about. I've seen non-competes that restricted the employee from working anywhere in the country for a period of 20 years. In one case, the document was arbitrated and found to be unenforceable.

[Lonesomedave]

Originally Posted by guy n. cognito

Keeping one's word to your spouse, kids, or friends is a noble thing. "Keeping ones word" to a corporate entity that would cut you in a second if they thought it would add half a penny to EPS is, IMHO, naive.

right?.....do what you have to do to get the job, and THEN, when it no longer suits you to do so....break your word at will.

that's become the "AMERICAN WAY" now, has it?

look, these agreements are usually for a specific purpose and the company has a right to use them, if reasonable.

you act like both parties are not on equal footing at the time of employment....sorry, they are.

the company wants a good employee who will not (for whatever purpose the company has decided), leave, and take secrets, customers etc with them and go to their competitors.

the potential employee wants a job, but can choose to work or not work for a particular company.

if you don't like it, don't work for that particular company (or say you want the job, but will not sign the no-compete)....if asked to sign one after already being employed, and you don't like it, refuse.

both sides should be prepared for the consequences. company my lose valuable potential employees or you may not get the job...or may lose your job.

but to give your word, when you have no intention of keeping it opens the door to some really bad conduct, and i don't think you want to be a part of it.

would YOU like to loan money to a friend in need, only to have him turn around and say "yeah, i know i PROMISED, but it is no longer in my interest to keep my promise...and, anyway, i had no intention of paying you back when i signed your promissory note"?

if you want to be an honorable person, you can't pick and choose who you will keep your word to. you are just rationalizing doing whatever you want to, and to h**l with your word.

[Lonesomedave]

Originally Posted by guy n. cognito

Just about. I've seen non-competes that restricted the employee from working anywhere in the country for a period of 20 years. In one case, the document was arbitrated and found to be unenforceable.

really? could you please show me one of those, because i don't believe it....i think you just made it up.

you act like companies are doing this for malicious reasons....they are not. they have rational reasons for doing so, AND they want them to be enforced where necessary....the kind of agreement you have just stated "you have seen" would be laughed out court in every state.

[guy n. cognito]

Originally Posted by Lonesomedave

really? could you please show me one of those, because i don't believe it....i think you just made it up.

you act like companies are doing this for malicious reasons....they are not. they have rational reasons for doing so, AND they want them to be enforced where necessary....the kind of agreement you have just stated "you have seen" would be laughed out court in every state.

Know anybody at 5/3 Bank? Find someone that used to work at Franklin National, and ask them to see the non-compete they were required to sign by 5/3 before getting their earned bonuses post merger. Then come back here and call me a liar again, friend.....

Several employees refused, and several went to arbitration. Ultimately, the document was eliminated. You are correct about one thing...it would have been laughed out of court....but that doesn't keep companies from trying to get them signed every day.

[Lonesomedave]

no, it doesn't work that way, show me the agreement. or point it out to me, where i can read it)...YOU are the one who asserts something, i just asked you for verification.

and, BTW, i did NOT call you a liar....i said (or at least implied) that i THOUGHT you were lying.

and, have you actually SEEN the document in question? or are you just going by hearsay.

[guy n. cognito]

Originally Posted by Lonesomedave

no, it doesn't work that way, show me the agreement. or point it out to me, where i can read it)...YOU are the one who asserts something, i just asked you for verification.

and, BTW, i did NOT call you a liar....i said (or at least implied) that i THOUGHT you were lying.

and, have you actually SEEN the document in question? or are you just going by hearsay.

Yes, I've seen the document. Yes, I've talked with several people that received the document and were REQUIRED to sign it before they received a bonus that was already earned and payable. No, I don't have a copy of a document that was provided to others in 2006.

What sort of law, do you practice, Dave? Do you do any work in employment or contract law? Have you ever done any large corporate representation on employment matters? Because, I would think that you would have that kind of experience to call me a liar on a public forum.

[Lonesomedave]

Originally Posted by guy n. cognito

Yes, I've seen the document. Yes, I've talked with several people that received the document and were REQUIRED to sign it before they received a bonus that was already earned and payable. No, I don't have a copy of a document that was provided to others in 2006.

What sort of law, do you practice, Dave? Do you do any work in employment or contract law? Have you ever done any large corporate representation on employment matters? Because, I would think that you would have that kind of experience to call me a liar on a public forum.

well, again, i DID NOT call you a liar....but assuming, for the sake of argument, that someone did call you a liar, why would that be so preposterous?

by your own admission, you advocate a course of conduct which, in effect, says : "i will make whatever promises i have to to get what i want today...i may have no intention of keeping my promise, but the person to whom i am giving my word doesn't know that....SO i will promise today, and do whatever is in my best interest tomorrow"

why is it outrageous to think that a person who has this type of moral philosophy would not scruple to fudging facts in order to win an argument?

[fdeck]

Note that I'm not a lawyer.

I think there's one point of confusion in this thread. The contract that prohibits you from sharing your employer's secrets is a non disclosure agreement. "Competing" is something else, where you engage with the same clients, customers, or sales territory. It could very well be that the notion of "competing" is irrelevant unless you are in a customer facing job such as a salesman.

If you're a hod carrier, and you go to work as a hod carrier for another employer, you're not competing with your previous employer.

[Indiana Mike]

Originally Posted by guy n. cognito

Keeping one's word to your spouse, kids, or friends is a noble thing. "Keeping ones word" to a corporate entity that would cut you in a second if they thought it would add half a penny to EPS is, IMHO, naive.

agreed.

Non competes were once meant for executives and the like that could bring an entire company down.

My employer had everyone sign them including thenliw paid office help ,even the receptionist!!!

They cannot work for any competitor for three years after leaving .

I find that ridiculous....

Im on the union side and did not sign one.

[guy n. cognito]

Originally Posted by Lonesomedave

well, again, i DID NOT call you a liar....but assuming, for the sake of argument, that someone did call you a liar, why would that be so preposterous?

by your own admission, you advocate a course of conduct which, in effect, says : "i will make whatever promises i have to to get what i want today...i may have no intention of keeping my promise, but the person to whom i am giving my word doesn't know that....SO i will promise today, and do whatever is in my best interest tomorrow"

why is it outrageous to think that a person who has this type of moral philosophy would not scruple to fudging facts in order to win an argument?

Dave, I question whether or not you are really an attorney. Because, honestly, any second year law student would know that everything is negotiable and debatable in court. Furthermore most attorneys are better readers than this, and would see that I've never said or inferred what you stated above. Rather I suggested that convoluting moral obligations with corporate legal documents is naive, especially in cases where employers consciously create documents that they know would not stand the scrutiny in court.

[guy n. cognito]

Originally Posted by Indiana Mike

agreed.

Non competes were once meant for executives and the like that could bring an entire company down.

My employer had everyone sign them including thenliw paid office help ,even the receptionist!!!

They cannot work for any competitor for three years after leaving .

I find that ridiculous....

Im on the union side and did not sign one.

We have bank tellers that were required to sign them..........5 years with "any" competitor with no geographic limitations.