Are agreements not to re-hire lawful?

The following is included in my severance pay agreement:

Future employment: You agree you will not seek future employment with the company, or its affiliated entities, subsidiaries, divisions, successors, and/or parent corporations at any time in the future. You further agree that if you knowingly or unknowingly apply for a position with the Company or its affiliated entities, subsidiares, divisions, successors and/or parent corporations, and are offered or accept a position, the offer may be withdrawn, or you may be terminated immediately, without notice, cause or recourse.

Is this legal? can they make me sign something regarding future employment? what if my future employer buys this company? could they exercise this clause and fire me? What is the extent of this clause. So far they refuse to remove it, and of course won't pay the severance unless I sign the complete agreement. It is in NY state, in case it matters.

thank you.

1 answer  |  asked Mar 15, 2001 8:29 PM [EST]  |  applies to New York

Answers (1)

David M. Lira
Agreements not to re-hire in settlements and sever

The clause you identified in your e-mail is a very common clause in agreements settling employment related claims. I don't recall ever seeing this clause in a severance agreement. In the severance context, I have a harder time seeing why an employer would want it.

Is it legal? In one sense, I don't know because I don't recall ever seeing a case challenging this type of clause. However, my sense is that a court would probably find the clause you quoted in your e-mail to be legal. Why? Because it is fairly narrowly written. It applies only to applications for employment, and, at that, only one employer (and related entities).

Concerning your hypothetical of your current employer acquiring your former employer, to a question of "could," the answer necessarily always, ALWAYS, has to be yes. But that is not the relevant question. The question is whether the clause would be a successful defense to a suit brought by you on such a termination. Again, I really don't know because I have never seen a case like that, but I doubt it, again, because the clause applies to applications for employment to the former employer. In the case of an acquisition by your current employer, you have not applied for employment to the former employer. You are already a current employee of the current employer.

However, this good news has to be tempered by New York's employment at will doctrine. Unless you fall under an exception, and there are numerous exceptions, an employment contract or union membership being just two, the general rule is that you can be fired at any time for any reason or no reason at all. Thus, a current employer would not even have to use the contract with the old employer to fire you.

I hope this helps.

Sincerely,

David M. Lira

posted by David M. Lira  |  Feb 21, 2001 12:53 PM [EST]

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