Noncompete clause?
September 15, 2007 7:12 AM Subscribe
Noncompete clause? Will I not be allowed to work in my field for an entire year?
I apologize in advance for this question.
I signed a noncompete clause when I was hired (medical education company, New York city) - that states I will not do the same job for a year after I leave voluntarily.
I was just offered another job and the contract states that you can only accept the new job if you have not signed any noncompete clauses.
If I wait even a few months (in New York city) prior to going back into the industry, I'll starve, so a year for me is unreasonable.
What is the likelihood of getting out of this? What if I just leave my current employment place with no explanation or notice (note that I've had 3 peers do the same in the last few months).
I'm also worried because as it is, I'd like to give a 2 week notice (the job starts in exactly two weeks). I can't do so if I need to run around and see lawyers first...making this situation even worse.
I won't be so naive next time.
I apologize in advance for this question.
I signed a noncompete clause when I was hired (medical education company, New York city) - that states I will not do the same job for a year after I leave voluntarily.
I was just offered another job and the contract states that you can only accept the new job if you have not signed any noncompete clauses.
If I wait even a few months (in New York city) prior to going back into the industry, I'll starve, so a year for me is unreasonable.
What is the likelihood of getting out of this? What if I just leave my current employment place with no explanation or notice (note that I've had 3 peers do the same in the last few months).
I'm also worried because as it is, I'd like to give a 2 week notice (the job starts in exactly two weeks). I can't do so if I need to run around and see lawyers first...making this situation even worse.
I won't be so naive next time.
In the US, almost all non-competes will be found to have geographical limits, even if they're not written in. The courts don't look favorably on them, as they are (by name as well as nature) anti-competitive. As a result, they are usually interpreted narrowly and/or overturned.
BUT -- your new contract states you can only accept the new job if you have not signed any noncompete clauses. Even if your non-compete is found to be invalid, you're still lying to your new employer and breaching the contract. I think that's the stickier issue. Old employer, in reality, probably won't come after you too hard; but lying to new employer from the get-go could come back to bite you pretty hard.
I'd look into either a) consulting with an employment lawyer in NYC (legal aid, if necessary); b) moving to another city, as the corpse in the library suggests; or c) finding a new job in NYC whose contract does not require you not to have signed a non-compete.
posted by katemonster at 7:40 AM on September 15, 2007
BUT -- your new contract states you can only accept the new job if you have not signed any noncompete clauses. Even if your non-compete is found to be invalid, you're still lying to your new employer and breaching the contract. I think that's the stickier issue. Old employer, in reality, probably won't come after you too hard; but lying to new employer from the get-go could come back to bite you pretty hard.
I'd look into either a) consulting with an employment lawyer in NYC (legal aid, if necessary); b) moving to another city, as the corpse in the library suggests; or c) finding a new job in NYC whose contract does not require you not to have signed a non-compete.
posted by katemonster at 7:40 AM on September 15, 2007
(this is not legal advice and probably depends heavily on the actual language of the contract)
Let's say you do leave with no explanation or notice.
Best case scenario: No one ever notices what you did; now you have a new job.
Worst case scenario: You start the new job, and weeks (or months) later, Old Employer discovers that you're violating the non-compete clause. They sue you and New Employer. New Employer fires you because you lied when you accepted the job and because they have a better shot of getting out of the suit if they can prove that they had no idea you were under such a contract when they hired you. (This is the primary reason New Employer has the term in the job offer.) You look for a new job while simultaneously defending yourself from a breach-of-contract suit that you will probably lose. Oh, and you may have to disclose that you are currently being sued by a former employer to anyone who asks while you're applying for new work. You starve.
I won't tell you what to do, but I will tell you that it's usually cheaper to "run around and see lawyers first" than to do it after. Tread carefully.
posted by Partial Law at 7:41 AM on September 15, 2007
Let's say you do leave with no explanation or notice.
Best case scenario: No one ever notices what you did; now you have a new job.
Worst case scenario: You start the new job, and weeks (or months) later, Old Employer discovers that you're violating the non-compete clause. They sue you and New Employer. New Employer fires you because you lied when you accepted the job and because they have a better shot of getting out of the suit if they can prove that they had no idea you were under such a contract when they hired you. (This is the primary reason New Employer has the term in the job offer.) You look for a new job while simultaneously defending yourself from a breach-of-contract suit that you will probably lose. Oh, and you may have to disclose that you are currently being sued by a former employer to anyone who asks while you're applying for new work. You starve.
I won't tell you what to do, but I will tell you that it's usually cheaper to "run around and see lawyers first" than to do it after. Tread carefully.
posted by Partial Law at 7:41 AM on September 15, 2007
Oh, and -- non-competes are also usually found to have reasonable time limits. Likely only an employment lawyer in the jurisdiction could tell you what local courts have found is "reasonable" in the past, and what's likely to apply in your case.
posted by katemonster at 7:42 AM on September 15, 2007
posted by katemonster at 7:42 AM on September 15, 2007
Show it to your potential new employer and let them decide.
posted by caddis at 7:49 AM on September 15, 2007 [1 favorite]
posted by caddis at 7:49 AM on September 15, 2007 [1 favorite]
I'm not a lawyer, and I haven't read the stickied thread about answering legal questions on Ask, but as I recall, at least in California, non-competes don't hold up. You can't be prevented from earning a living. Not even if you signed a contract.
How flexible is your new employer? You might ask if there are exceptions to the no new hires with existing non-competes policy.
posted by notyou at 7:53 AM on September 15, 2007
How flexible is your new employer? You might ask if there are exceptions to the no new hires with existing non-competes policy.
posted by notyou at 7:53 AM on September 15, 2007
Non-competes are generally worthless. I've never heard of one being invoked ever. I have been told by executives that they are primarily for their level: executives, or the occasional superstar. If Sergey Brin went to work for Yahoo, they'd fire it up. For grunts like me, they are meaningless. Companies can't really prevent you from making a living.
notalawyer, etc.
posted by chairface at 8:39 AM on September 15, 2007
notalawyer, etc.
posted by chairface at 8:39 AM on September 15, 2007
IANAL, but my understanding is that non-competes can't be enforced if you would otherwise be unable to work. If you've built up expertise in a field, you cannot be expected to go on hiatus before you take on another job.
posted by acoutu at 9:00 AM on September 15, 2007
posted by acoutu at 9:00 AM on September 15, 2007
It might be worth contacting a lawyer if only to get a definitive answer on whether or not non-compete clauses are enforceable in NY.
In CA, as some others have mentioned, they are more or less meaningless, and are more of a scare tactic that have no real means of being enforced. When my company tried to have a "no compete" written into the contact when one our partners was leaving the company, we were told by our lawyer that he could put it in, but if our former partner were to fight it (even if he signed the contact that included it) we would have little ground to stand on.
posted by The Gooch at 9:18 AM on September 15, 2007
In CA, as some others have mentioned, they are more or less meaningless, and are more of a scare tactic that have no real means of being enforced. When my company tried to have a "no compete" written into the contact when one our partners was leaving the company, we were told by our lawyer that he could put it in, but if our former partner were to fight it (even if he signed the contact that included it) we would have little ground to stand on.
posted by The Gooch at 9:18 AM on September 15, 2007
In some states, non-competes most certainly DO hold up, and they can be for almost anyone, not just high-level execs. Companies will spend a lot of money to enforce their non-competes if the employee has important information, if the company really doesn't like the competitor, and for other reasons. If you really want the new job, talk your noncompete over with them (do not lie and say you don't have one), then get a lawyer to try to negotiate you out of it - maybe you modify your duties slightly, promise not to contact customers, or whatever. If you can't go any time without a job in your area, you may want to rethink this.
posted by dpx.mfx at 9:24 AM on September 15, 2007 [1 favorite]
posted by dpx.mfx at 9:24 AM on September 15, 2007 [1 favorite]
PLEASE PLEASE PLEASE don't listen to the people posting above. IAAL. I do a great deal of work on both sides of the non-compete issues, enforcing and avoiding. California is a special case, as the State Constitution explicitly bars the enforcement of non-competes. Non-competes of any kind are therefore generally unenforceable in California. You are in New York (where I practice) non-compete law in New York is FAR more complicated. Companies successfully enforce one-year non-competes in New York all the time -- it's a highly fact-specific inquiry under New York law (having to do with how well you are paid, how vital your services are, how much non-public information you have and other things) and you must see a lawyer. You simply can't get an answer to this question here.
Having said all that, the person above who mentioned the new contract was right: if it says you can't work at the new place if you "have a non-compete" (rather than, say, if you have an "enforceable non-compete") then you can't work at the new place. End of story. Again, the facts and the language of both the old and new contracts will matter a lot. Ignore the green. See a lawyer. IANYL.
posted by The Bellman at 9:29 AM on September 15, 2007 [5 favorites]
Having said all that, the person above who mentioned the new contract was right: if it says you can't work at the new place if you "have a non-compete" (rather than, say, if you have an "enforceable non-compete") then you can't work at the new place. End of story. Again, the facts and the language of both the old and new contracts will matter a lot. Ignore the green. See a lawyer. IANYL.
posted by The Bellman at 9:29 AM on September 15, 2007 [5 favorites]
If you're feeling really really optimistic, you might see whether your soon-to-be-ex-employer will agree to amend your employment contract. There's not much in it for them, though.
posted by hattifattener at 12:13 PM on September 15, 2007
posted by hattifattener at 12:13 PM on September 15, 2007
There's not much in it for them, though.
Not true, depending upon how competitive the marketplace is. We take people on all the time who have signed noncompetes and are willing to take up the challenge from their ex-employers if necessary. It almost never is. It they put a lot of money into training or you have really secret and valuable info perhaps. Nevertheless, I have heard that the test prep area pushes this pretty hard. It isn't clear from the Q if that is where you are. That is why I recommend asking your prospective employer whether they are concerned.
posted by caddis at 3:45 PM on September 15, 2007
Not true, depending upon how competitive the marketplace is. We take people on all the time who have signed noncompetes and are willing to take up the challenge from their ex-employers if necessary. It almost never is. It they put a lot of money into training or you have really secret and valuable info perhaps. Nevertheless, I have heard that the test prep area pushes this pretty hard. It isn't clear from the Q if that is where you are. That is why I recommend asking your prospective employer whether they are concerned.
posted by caddis at 3:45 PM on September 15, 2007
That was unclear. We are willing to take up the challenge for our new employees. We do it when there is a good defense, or when it seems unlikely that there will be a challenge. Those ex-employers take our people too. It doesn't always pay to fight, only when something is on the line. Your potential new employer will know best where to draw the line, and where it is typically drawn in your area and industry.
posted by caddis at 3:54 PM on September 15, 2007
posted by caddis at 3:54 PM on September 15, 2007
I was the original poster, and had to be anonymous while determining my status at my old place of employment.
For those of you in the same industry with a noncompete - it was very easy to resolve. I did show the employer my noncompete clause. They made a note of my work duties at my old company (therapeutic areas/companies). They wrote a new job description for me, and I can do the same type of work, but just not areas that overlap with the old workplace.
Apparently noncompetes are very common in my industry, and it is not uncommon for employees to be stolen from competing companies.
Future note to self: Do not sign noncompetes.
posted by Wolfster at 10:50 AM on September 30, 2007
For those of you in the same industry with a noncompete - it was very easy to resolve. I did show the employer my noncompete clause. They made a note of my work duties at my old company (therapeutic areas/companies). They wrote a new job description for me, and I can do the same type of work, but just not areas that overlap with the old workplace.
Apparently noncompetes are very common in my industry, and it is not uncommon for employees to be stolen from competing companies.
Future note to self: Do not sign noncompetes.
posted by Wolfster at 10:50 AM on September 30, 2007
This thread is closed to new comments.
posted by The corpse in the library at 7:21 AM on September 15, 2007