Forced to sign non-compete or lose year end bonus

My employer has just sent out a very broad non compete (2 years, globally) to limit me from working for a like company. The email states that my 2004 bonus and 2004 options will be witheld unless I sign by December 31st.
1) Can my typcial year end bonus be cosidered 'consideration' for signing this noncompete? (We had been told to expect the bonus long before mention of this new non compete)
2) I feel like my employer is dropping this on me with short notice, threat of loss of comppensation, and at a time when they realize it might be difficult to consult an attorney (holidays) Could this be a potential out?
2 years seems like a long time to keep a person from using their skill set to make money...

2 answers  |  asked Dec 15, 2004 5:29 PM [EST]  |  applies to Texas

Answers (2)

Pamela Parker
Invalid non-compete

In Texas, it is extremely difficult for an employer to create a valid non-compete for current employees. If there are no other facts than the ones you described, this non-compete would almost certainly be unenforceable in Texas.
What to do is an entirely different question.
Some possibilities:
1. sign it, get the bonus, and count on the non-compete being unenforceable if you later leave and go to work for a competing company. The downside is that you may have to fight, possibly in court, when you leave the company.
2. Decline to sign it, and fight about the bonus now. If the eligibility requirements were published and met prior to this non-compete issue coming up, then they probably cannot withhold the bonus. But they may try, which means you have to fight, and then you jeopardize your security in the job.
3. Tell them you don't believe the non-compete is legally enforceable, and see what they do after that. You can go in and just say you read some stuff, or say you consulted an attorney, or have an attorney talk to them on your behalf. Which strategy is best depends on a whole host of circumstances personal to your own situation. The upside of this approach is that you deal headon with all the issues now, and avoid fights lurking around the corner. The downside is that you might wind up in a fight now.

posted by Pamela Parker  |  Dec 16, 2004 09:05 AM [EST]
Trey Henderson

If your bonus was already due to you, the employer may not be able to withhold it. However, if you are an employee at will, it is possible that the employer could fire you if you do not sign the agreement. I encourage you to speak with an attorney.

posted by Trey Henderson  |  Dec 15, 2004 8:34 PM [EST]

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