Does a no-complete clause hold up?

Discussion in 'Off Topic [BG]' started by powderfinger, Jan 25, 2013.


  1. powderfinger

    powderfinger

    Joined:
    Feb 24, 2009
    So years ago I signed a no-compete clause when I was hired at my current job. My company has had a rough time for the past couple years, bad lots of bad decisions, etc. it might be financially beneficial for me to jump ship to a competitor at some point. I do not want to do this for any malicious reasons, but Im not making ends meet.... pay cuts... raise freezes... hiring freezes.... it's been tough.

    I actually like my job, and my employer, but if worse comes to worse, I Want to keep options open. Do these clauses hold up in Court? Ive heard varying thoughts. I personally think its un-American and anti free market, but what I think is largely irrelevant in the real world.

    And I wonder, if the company doesnt have money to give raises, and has to cut pay, I wonder if they'd be able to afford a lawyer.. Im guessing yes... :/
  2. hdracer

    hdracer Supporting Member

    Joined:
    Feb 15, 2009
    Location:
    Elk River, MN.
    From what I have seen they do.
    The big thing is if your new employer wants the hassle. Most don't.
  3. Marlat

    Marlat

    Joined:
    Sep 17, 2002
    Location:
    London UK
    I can't comment on US law, but its a very complicated area and depends on the nature of your role and the reasonableness of the clause. They are "hard" to enforce, but they are not unenforceable and one drafted by a lawyer who knows the area of law well will be enforceable.
  4. Handyman

    Handyman

    Joined:
    Sep 4, 2007
    Location:
    Austin, TX
    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.
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  6. Demon_Hunter

    Demon_Hunter

    Joined:
    Jun 8, 2008
    Location:
    I WANT OUTTA HERE!!!!
    Does the no-compete refer to "as you're an employee of the company" or does it state something like a time frame that you can't work for another company for a certain amount of time after you leave?

    I had one and it was for only while I was employed with that company.
  7. jugglingfreak

    jugglingfreak

    Joined:
    Aug 12, 2009
    Location:
    Savannah Ga.
    That.^^^^

    (Note: this is not meant to sound insulting) Also, it would depend on what level an employee you are.

    I mean, are you an Executive VP with company secrets or just and average Joe employee?

    In other words, would your moving to another company be worth the time, money and hassle for them to take you to court over it?
  8. TolerancEJ

    TolerancEJ

    Joined:
    May 27, 2010
    Location:
    Vancouver, BC Canada
    No-compete clauses are generally set in place because they're afraid you're going to share sensitive company secrets with a competitor.

    Maybe just arrange a discussion with management, voicing your concern(s). I'm sure your thoughts would not be alone among the company's employees. Maybe they'll begin pointing your company in the right direction.

    Otherwise, maybe you can politely request the No Compete clause to be waived so you can seek employment elsewhere. Instead, you offer them your word (or even a replacement contract/clause) that you won't share their company information with an outside company.
  9. sloasdaylight

    sloasdaylight Banned

    Joined:
    Feb 4, 2009
    Location:
    Tampa, Florida, US
    A friend of my ex had to move himself and his family to South Carolina so that he could get a better job that wouldn't get him into hot water because of the Non-Compete he signed.
  10. uOpt

    uOpt Supporting Member

    Joined:
    Jul 21, 2008
    Location:
    Boston, MA, USA
    In California they are NIL.

    I have heard C-officers say that they are psychological only even in MA. They simply scare off a certain amount of people and that's better than doing nothing.

    In general these are more of an issue for your new employer. If they are willing to do it I would probably agree and let the two companies duke it out.

    The specifics play a role. You can't make a NDA that says "no computer stuff". The narrower the less likely to be tossed (and the easier to obey it).

    In court it is likely that they look at specifics - what kinds of secrets do you actually know and are they directly useful for the employer in question.

    Disclaimer: not a lawyer blah blah.
  11. Lonesomedave

    Lonesomedave

    Joined:
    May 13, 2011
    Location:
    Nashville, Cats
    I AM a lawyer...so here goes....(understand, this is NOT legal advice....the only actual ADVICE i am giving you is to consult your own lawyer...one who actually practices this area and in your state, and can give you actual advice, not vague generalities like i am about to do)

    not bad suggestions, but i have a better one, if you are really concerned. go and get your own lawyer, one who's local to the area you plan to work (and hopefully, one who is familiar with the law of the place you are leaving...they might be the same if you're not planning on moving)

    non-compete clauses generally must be reasonable as locale and duration. that is, a non-compete the includes the entire United States must have real justification to be enforceable.

    likewise, a non-compete that follows you for the rest of your life would be almost per se unenforceable.

    usually, non-competes say something like: in this state for 5 years....or something like that.

    the agreement also must be reasonable as far as what conduct is prohibited. if one said, for example, you agree not to work at all, in any capacity, for anybody, for 5 years after leaving this company, it would, of course, be thrown out.

    as far as being unAmerican...YOU signed it...did they put a gun to your head?. many places have non-competes as a condition for employment of a certain level of employees. they do this, as said, generally because they want to protect secrets or proprietary processes. there is nothing unreasonable about this at all, as long as the signing is voluntary.

    i mean, would YOU want a bunch of people to be hired by you, learn all your secrets and then rush out to spill them to all your competitors?

    as long as reasonable, most states will enforce them...but you have to show that the former employee is actually competing.

    if you have your own lawyer look at the agreement and explain to him (or her) your proposed course of conduct, the lawyer will be able to tell you whether you are running the risk of being sued by your former company.

    [​IMG]
  12. MatticusMania

    MatticusMania LANA! HE REMEMBERS ME!

    Joined:
    Sep 10, 2008
    Location:
    Pomona, SoCal
    If I signed a no-complete clause for my company I would just start work all the time and then not finish it...
  13. powderfinger

    powderfinger

    Joined:
    Feb 24, 2009
    Im a mid level employee. Not mgmt. Not any sort of exec. I doubt the competition wants any of our propiretary secrets, as we are floundering, and they are kicking royal ass in our market. And if my company cant afford a raise or a bonus, isnt it fair to think they couldnt afford a lawyer?

    But yes, Ill consult a lawyer before I make a move.
  14. RS

    RS Supporting Member

    Joined:
    Aug 27, 2000
    Location:
    Cleveland, OH
    IME, most are poorly written and thus unenforceable.

    In your situation, it is unlikely you struggling company would bother or have the means to sure you.
  15. LiquidMidnight

    LiquidMidnight

    Joined:
    Dec 25, 2000
    As others have said, the enforceability of covenants not to compete are usually contingent upon how "reasonable" they are. That's interesting about California, though. I never knew that. And they usually are reserved for people like accountants and doctors, who could leave and take their clients with them.

    If you can hold out and you're worried about what breaking the covenant could mean, perhaps you could wait it out until your contract is set to expire. But I agree, speak with an attorney first.
  16. Indiana Mike

    Indiana Mike

    Joined:
    Nov 18, 2005
    My sister in law signed one ,quit her job ,and couldn't get a job in her field for three years .

    An attorney told her it was iron clad . He suggested never signing another one.

    She was asked in many interviews if she was currently under one and when she said yes the interview was over. she was in commercial insurance sales.

    I wonder , if you signed one with a false name such as John brown ( assuming your name isn't) would it still hold up ? Do you think an employer would even look close enough to make sure ?
  17. Lonesomedave

    Lonesomedave

    Joined:
    May 13, 2011
    Location:
    Nashville, Cats
    don't do it! don't even think of doing it.

    that is fraud...i don't think it's criminal, but at the very least, you run the risk of getting fired...and at the most, if they took you to court, and produced your personnel file with that agreement signed by "john brown", you could get hit with big punitive damages.

    [​IMG]
  18. hotsauce n eggs

    hotsauce n eggs

    Joined:
    Jan 20, 2013
    I would recommend against talking to your employer. In my experience, as soon as an employer knows that one of their employees is thinking of leaving, they will immediately start making arrangements to replace them(either by hiring someone else or reassigning duties to other current employees).
  19. Turock

    Turock Supporting Member

    Joined:
    Apr 30, 2000
    Location:
    Melnibone
    To give a promise or commitment, and then go back on your word, doesn't say much for one's character.
  20. guy n. cognito

    guy n. cognito Supporting Member

    Joined:
    Dec 28, 2005
    Location:
    Nashville, TN
    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.
  21. mrpackerguy

    mrpackerguy Supporting Member

    Joined:
    Jul 3, 2004
    Location:
    Madison, Wisconsin
    What he said. Very much a creature of state law, usually case law, not statutory law. Relevant factors in WI would be job type, geographic restriction and duration. But each state is different. Contact your state's state bar association for a lawyer referral service - you may get an answer in 5-10 min for free or real, real cheap.

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