Can a restrictive convenant prevent me from accepting any work at a customer site?

My employer laid me off. A customer of my former employer wanted to engage in consulting services with me. My former employer said I could not engage in the consulting services because of a non-compete that I had signed 18 years ago. Consequently, I worked for my former employer as an independent contractor for one year. Now the customer wants me to continue working for them directly. The work I would be doing is related but not the same as what I did for my former employer. Would my non-compete be upheld? Thank-you.

3 answers  |  asked Jan 11, 2010 1:52 PM [EST]  |  applies to Pennsylvania

Answers (3)

Doris Dabrowski
An enforceable non-compete agreement must be reasonable in the scope of the period of effectiveness and geography. Do you also have a non-solicitation agreement that may restrict contacts with customers of your former employer? Do you have an agreement for independent contractor services? An attorney must review all agreements between you and the other party.

Doris Dabrowski, 1525 Locust St. Philadelphia, Pa. 19102 215-790-1115

posted by Doris Dabrowski  |  Jan 11, 2010 4:24 PM [EST]
Christopher Ezold
Before I respond to your inquiry, I must state that we have not spoken, I have not reviewed the relevant documents and facts, and I do not represent you. Therefore, my discussion below is not a legal opinion, but is informational only. Finally, my discussion applies only to issues to which Pennsylvania or Federal law apply, unless otherwise specified.

That being said, a noncompete, or noncompetition agreement is generally NOT enforceable against a former employee who was terminated without cause. If you were laid off, and not terminated for cause, you may very well not be bound by the noncompete. Furthermore, independent contractors are not generally bound by noncompetition agreements - they are only generally effective against (a) employees and (b) persons who have sold a business. There is some case law applying a noncompete against a contractor that once was an employee, but that area of the law is still developing.

The problem you are facing may be more political than legal - if your employer wants to scare you off and/or scare the customer into not retaining you, the mere threat of a lawsuit, even unfounded, might work. There are steps you can take to prevent this, but what they are depends on the terms of your agreement and the facts surrounding your employment.

If you would like to discuss this matter further, please feel free to contact me at the below address(es) or number.

/Christopher E. Ezold/
Nancy O'Mara Ezold, P.C.
One Belmont Avenue,
Suite 501
Bala Cynwyd, PA 19004
(610) 660-5585
Cezold@Ezoldlaw.com
www.ezoldlaw.com

posted by Christopher Ezold  |  Jan 11, 2010 2:03 PM [EST]
Harold Goldner
Possibly, but nobody can tell without looking at the non-compete.

Non-compete agreements are generally not favored in the courts, but will be where the former employer has a genuine interest to be protected by the non-compete. Non-compete covenants must be reasonable as to scope, meaning geography, time and what they cover.

In addition, depending upon the circumstances of the end of your employment with the employer claiming protection, it's possible the provisions are waived altogether.

I suggest you speak to a PA employment lawyer with your non-compete, and any other employment contract in hand.

posted by Harold Goldner  |  Jan 11, 2010 1:58 PM [EST]

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