My employer made me sign a "non-compete" back in 1999. In 2000 they were acquired resulting in a new change in company name. There is nothing in the non-compete that allowed the transfer of my N/C Agreement to another company, and I never signed an updated one.
Is the original still valid?
The general rule is that a contract is assignable (can be transferred to another) unless the contract specifically provides otherwise, so the acquisition changed nothing. The new company can be assigned the contract, and it would be just as valid as it was with the old company.
However, under New York law, non-compete provisions are looked upon with much disfavor. In other words, if push came to shove, the non-compete clause is probably not valid. But that will depend not only on the terms of the agreement, but also the details of your actual job.
Whenever someone comes to me for a review of an employment contract with a non-compete clause, I tell them the same thing: If you sign that agreement you are buying a lawsuit. You'll probably win the lawsuit, but it's going to cost you a fair amount of money in attorney's fees. My feeling is that it is probably cheaper for you to just walk away from a job where the employer wants a non-compete.
Except on those rare occasions where an employer has legitimate concerns about protecting proprietary information, the only reason employers want non-competes is to lock you in to them. They want to lock you in because the market for your job is probably pretty competitive, so that you probably have a choice of jobs. So, my bet is that, in most cases where an employer wants a non-compete, you have very little to lose if you say no, and a lot to lose if you say yes. You have little to lose because you'll probably find another job fairly quick. You have a lot to lose in that, to get out of the non-compete, you either have to start an entirely new career or fight it out in court.
posted by David M. Lira | Jan 31, 2002 11:09 AM [EST]