How legally binding is a signed agreement not to work for the competition?

[In_The_Wind]

As part of the hiring package a good friend signed an agreement that he wouldn't change jobs to work for the competition for two years. What can his current employer do if he switches jobs to do the same type of work for another company?

[asthmaticeog]

1. They can sue him for breach of contract, among other things. nt

[In_The_Wind]

2. Is it really a legally binding contract?

There aren't any corporate secrets that he would be sharing.

[asthmaticeog]

4. Well, I haven't read it,

and I'm not a lwayer. ;)

But when you sign something, or even verbally agree to it, it's legally binding. And if a company is big enough to care about whether their hires jump ship, they can probably afford the serious legal muscle it takes to draft a solid contract and to make it hold up in court against some hapless employee.

[In_The_Wind]

6. I'm afraid you may be right. The starting salary is better. Too bad!

I guess it's a dodge to avoid giving raises. x( I think he's stuck. He enjoys helping people so I'd hate to see him change the type of counseling that he's doing.

[Gormy Cuss]

13. In some cases they are completely unenforceable

A place where I worked in Massachusetts had a seven page legalistic noncompete agreement but I was told by a coworker (lawyer by training)that it was an intimidation tactic and unenforceable because it would preclude any employment in the geographic area for the term. Your friend needs a lawyer.

[fishwax]

18. I'll second that

They are often unenforceable, but that doesn't stop employers from using them. As you say, it's an intimidation tactic.

The friend should consult a lawyer.

[The Velveteen Ocelot]

3. Depends on whether the court thinks it's too restrictive.

These contracts are generally contrued narrowly against the employer because they tend to limit a person's right to make a living. So it depends on the circumstances -- is there a geographic limit (can't work for a competitor in that state, but maybe somewhere else)? Is two years too long? Your friend should contact an attorney to find out how these contracts have been construed in his state. Typically there will be a liquidated damages clause, that is, if you break the contract you owe us a specific amount of money.

[billyskank]

5. There is such a thing as an unconscionable contract

But you are quite right, the only way to know is ask a lawyer.

Sigh. The answers to such questions always involve giving lawyers money. :(

[In_The_Wind]

9. It's hard for employers to find qualified workers.

I understand the investment of time training someone but nothing he has learned is specific to his company.

I think his only answer might to be: getting a job with a different title ... like supervising but I doubt that would feel as rewarding.

[In_The_Wind]

7. He isn't planing a move to another location. $2 an hour more is tempting.

x( I guess he'll have to stay put for a while.

[Callalily]

8. Be very careful here!

I'm sure they consulted lawyers b/4 it was drawn up. My friend had signed one and couldn't work for a competing company in the area for a year. That company had sued other employees who took positions with competitors. Even if you feel you don't have knowledge of "secrets", you signed the contract, and you would be held to that agreement.

That all said, yes, see a lawyer, but I suspect the company that makes people sign such an agreement has their legal butts covered.

[In_The_Wind]

10. You've all voiced my thoughts and concerns.

I think he's stuck where he is.

[fishwax]

19. i wouldn't be so quick to assume that

I suspect the company that makes people sign such an agreement has their legal butts covered.
Often this kind of clause works, whether it's legal or not, because most won't think to challenge it, and it may, just by its existence, keep employees from jumping ship. One shouldn't trust employers to necessarily follow the law :)

Here's an example case in which a company knowingly included an illegal non-competition clause in their confidentiality agreement: http://www.smrh.com/publications/pubview.cfm?pubID=141

[Deep13]

11. No casual advice is going to be adequate.

Talk to an employment lawyer. This is a tricky area that really needs expert advice.

[philosophie_en_rose]

12. True. We also don't have all of the facts.

The wording and form of the contract matter, as well.

Employment and contract laws are too complicated to provide specific advice.

[Midlodemocrat]

14. I think it depends on the state.

Here in VA, I believe those types of contracts are paper tigers. You can't restrict a person from making a living.

[Rabrrrrrr]

15. His current employer can sue his ass off.

Whether they'll win, of course, is up to the courts to decide.

But what can be done is, if he is valuable enough, the company hiring him will pay whatever the fines are for the breach of contract to the previous employer.

[eyesroll]

16. What everyone else said...plus, it depends on just how much this

restricts his ability to make a living.

If, say, he is an auto mechanic, and the contract says he won't work as an auto mechanic for anyone else for 2 years, that would likely get thrown out as too restrictive, because he pretty much won't be able to make a living at all.

If, say, he works as a computer programmer for an internet service provider, and the contract says he can't work for other internet service providers, that may be enforceable, because he can work for other companies as a computer programmer. If it says he can't work as a computer programmer at all, then it should be too restrictive.

From what I've seen, two years may be considered too long. Some states, I know, won't enforce a noncompete clause for longer than a few months or a year. Get a lawyer.

[nothingshocksmeanymore]

17. In California, they mostly aren't worth the paper they are written on

unless you are selling a business to a new owner and agree not to compete. In employment contracts here they are virtually worthless. Case law is on the side of the emplyee.

You don't say what state this was signed in. Your friend's best bet is to call an employment lawyer in that state and determine if the contract (or the non- compete clause within it) is valid. In most states this issue has been litigated and case law determines if the scope of the contract is too confining.

[In_The_Wind]

21. I suggested calling a lawyer.

He's in Florida, working for a drug treatment clinic. Some of the people he sees on a daily basis would be back on the streets looking for a fix if the clinic wasn't there. He makes their lives more bearable and adds a smile to everyone's day as often as he can.



I'm glad you posted here. I didn't want to bother you with a PM asking about this. :hi:

[nothingshocksmeanymore]

22. You are welcome to bother me anytime

One of my pals has a practice here and in Fla. I'll ask him if he knows a good referral if you tell me the general vicinity your friend is in...it's a big state :D

BTW, just at a glance a two year non-compete clause in that industry seems too restrictive to be enforcable.

[Hugin]

20. It depends on if your friend can afford a better lawyer than they can...

Clauses in contracts like this are stupid.