Should I lawyer up for an unenforcable Non-compete?

June 16, 2009 9:57 AM

Consultant legal filter: Over-broad non-compete + me jumping to a client firm + angry former boss = well, what exactly?

I'm this guy from DC who was given a very bad contract. Now I'm getting out but I'm concerned about my legal rights.

I worked for this consulting firm for the last few weeks while I tried to line up other work. There is a client firm, government agency, that I had done some support work for and they approached me to come on as a full time employee doing some of the same work, but also much more outside the current support contract which ended in July. Now that they have me they've decided to end the contract Monday.

Well I jumped because it's a great opportunity but now I've been threatened with legal action. I did sign an NDA, but the restrictions are very broad and I've gotten legal advice that no court will uphold it. the full text of the section which was buried in another paragraph is:

In addition, second party agrees it will not directly or indirectly attempt to appropriate or otherwise take for its benefit the business opportunity of the company as it relates to the business of the company.

Now the former boss is pissed and said if I go forward to expect legal papers. The legal team at the firm said they're protected (the firm) and that if he went after me personally this agreement would never stand up in court. But I know people can sue for any reason, even poor ones.

Given the situation, and knowing YANML, TINLA, What steps should I take to protect myself now? Only talk in email or something? Is it time to lawyer up or wait until I get served which may never happen?


Thanks to all of you, again.

posted by anonymous to law & government (11 comments total)

Wait until you get served. Get a lawyer once you do. Threats are easy, filing lawsuits are work.

Do some research on finding counsel.
posted by Ponderance at 10:07 AM on June 16

Did you do the support work through the consulting firm you were contracted to? If so then they'd reasonably be entitled to a placement fee. Usually this is 20-25% of the starting salary. If you were contracting independently for the agency and the consulting firm never asked about presenting you to them then fuck 'em, they get nothing.
posted by IanMorr at 10:17 AM on June 16

IANAL.

This is confusing to me:

There is a client firm, government agency, that I had done some support work for and they approached me to come on as a full time employee doing some of the same work, but also much more outside the current support contract which ended in July. Now that they have me they've decided to end the contract Monday.

Does this mean that you worked for this firm as a contractor, and your company's contract with them was expected to run through July? And that, since you've agreed to go work for them full-time, they've terminated the contract early?

If that's correct, this is not a simple NDA issue, but a contract dispute between your agency and their client that you're about to get caught up in. NDA's are generally worthless, but it sounds to me like your potential new employer is looking to outright screw over your current agency. If your new employer is not willing to cover any potential legal costs, but instead is going to leave you out on your own over this (which it sounds to me very much like they will), I'd walk- this is their problem, you should not be on the hook for it.
posted by mkultra at 10:41 AM on June 16

I think the story is this:

- moved to DC
- signed up with a "body shop" who found him work at a help desk
- signed an NDA with the body shop
- help desk ppl offer him/her a better job
- s/he takes it, annoying the body shop
- new employer rescinds employment offer
- body shop threatens legal action over non-compete, NDA, whatever
- anon is now jobless and dreaming dreams of litigation

If you were offered a job that bears little relation to your help desk position, which seems like there would be no legal conflict.

You'd probably be wise to spend $200 and discuss this with a lawyer. If you don't have the money, perhaps the local labor department could help.

In the meantime, you should just devote 95% of your energy towards finding a new job.
posted by KokuRyu at 11:46 AM on June 16

mkultra is right. If the agency stole you from the consulting firm and then terminated its contract with the consulting firm early because it now has you on board, this is way bigger than an NDA. Lawyer up now and make sure you haven't done something wrong. It's entirely possible, though, that it's the agency on the hook, and you're just caught in the middle. If that's the case, the consulting firm might not have a legal leg to stand on.

This isn't my field, and your question isn't entirely clear, but my hunch is that you need legal advice now so that you don't need legal representation later.
posted by Capri at 11:50 AM on June 16

I am not your lawyer. You need one. Contact the bar association in your area if you need a referral. Also, this:

Only talk in email or something?

I don't even know what that means. But bear in mind that, unless they are protected by something like attorney-client privilege, any emails you write could be discoverable in a lawsuit (ie, you'd be legally obligated to turn them over to the other side).
posted by Conrad Cornelius o'Donald o'Dell at 12:56 PM on June 16

follow-up from the OP

Sorry for the confusion, KotoRyu was close to the situation:

- moved to DC
- signed up with a "body shop" to do server work, ended up only doing helpdesk
- signed an NDA with the body shop
- help desk ppl offer him/her a better job not doing help desk
- s/he takes it, annoying the body shop
- body shop threatens legal action over non-compete, NDA, whatever
- anon gets told by helpdesk ppl's lawyers not to worry
- anon makes post
- "body shop" calls back with higher pay offer (got up to +$15k!) followed by threats of litigation (?)
- anon confused.


Does this mean that you worked for this firm as a contractor, and your company's contract with them was expected to run through July? And that, since you've agreed to go work for them full-time, they've terminated the contract early?

Yes and no. There is no contract between anyone other than me and the sub agency "body shop". Support until July was provided without contract on the assumption they (body shop) would win a multi-person support contract for a year. Their proposal was outrageous - $2.5 mill+ for supporting a 50 person shop - and it was handled so bad the agency "help desk ppl" want nothing more to do with them.

FWIW I was hired specifically to support this big contract that will never happen and was doing helpdesk becasue they had nothing else for me to do onsite.

This all went down about two weeks prior to the agency" helpdesk ppl" approaching me about a position.

I think thats everything. Again, thank you all for your help.

posted by jessamyn at 1:14 PM on June 16

Personally, I wouldn't spend one cent on a lawyer. If I'm reading it correctly, this is a contract dispute between the asker's current agency and their client. He should ask the client (his potential new employer) to indemnify him from any potential legal claims from his former employer that arises as a result of his hiring.

As for the NDA itself, the clause you quote is so bullshittingly vague it's ridiculous. Unless it's got specific terms like "you will not enter the employment of company X's clients for a period of Y days after termination", that's one thing you don't have to worry about (again, IANAL).

Ultimately, what I think you should be prepared for is not that you yourself will be in hot water, but the prospect that your job offer will fall through. If the client firm is breaking the terms of their agency contract (which is quite possible, those things are much more explicit than any NDA you'll sign), they may decide it's easier to rescind the offer rather than fight in court for someone who is (all due respect) not a key employee. Then you're stuck in an awkward situation with your current agency; if you're aggressive about it, though, you can work it to your advantage (a client liked you well enough to want to hire you away in the first place).
posted by mkultra at 1:25 PM on June 16

On seeing the update-

Ah, OK. Tell your agency to fuck themselves. Go enjoy your job.
posted by mkultra at 1:27 PM on June 16 [1 favorite]

The legal team at the firm said they're protected (the firm) and that if he went after me personally this agreement would never stand up in court.

I know this is swimming against the current here, but if lawyers at your new firm told you you don't need a lawyer, and they've got you covered, I'd tend to believe them and not worry about it yet. They have an ethical obligation to recommend that you get a lawyer if the agency's interests conflict with yours. I mean, you're not all alone here, you have some legal advice, and the old firm is just threatening at this point. You can re-evaluate if you ever get sued.
posted by palliser at 1:37 PM on June 16 [1 favorite]

I worked in a fairly small industry a couple of years back, the kind where there are only so many companies that do what you do. So wanting to look for another job could be problematic with the standard non-compete. However, the advice I got (from a superior in the company who had consulted legal eagles) was that the non-compete clause could not legally be enforced in either Canada or the U.S.
IANAL.
posted by Billegible at 10:02 PM on June 16