Former employer making disparaging remarks and trying to impose non-compete after the fact

I resigned from my previous employer to accept a new position. In accepting the new position, I did NOT sign a non-compete agreement.
Despite a strong and exceptional track record in my position, I was informed several months ago that my position was being eliminated for matter unrelated to job performance. I was then given a formal "termination date" and assigned to continue with my current duties for the next three weeks leading up to the termination date. I was offered a severance package which would allow me to maintain regular pay and health benefits for an additional month after my departure provided that I sign a severance agreement primarily stipulating that I agree not to take any legal actions against the company. I was additionally informed that should I leave the company prior to the pre-determined termination date my departure would be construed as a resignation and I would not qualify for any severance benefits or unemployment benefits. Put simply I was quite devastated by all of this and my position and my single greatest concern was ensuring the well being of my wife and kids; hence I signed the agreement to ensure that we would at least have health insurance and some viable income for at least another month. Part of the severance agreement included language indicating that I - as an outgoing employee - was required to maintain the confidentiality of all information acquired in my time with the company. This specifically outlined use of the company client database and other inellectual properties, but made no specific mention whatsoever as to anything that would bar me from working within our respective field. Based on this, I signed the agreement. Most recently, I have secured a new position and - since I had not signed a non-compete agreement - I am now a competitor of my former employer. It seems that my former employer has learned of this and they are now attempting to prevent me from working in this field under the "confidentiality" language outlined in the severance agreement (which again, was signed under emotionally taxing and extremely stressful circumstances). I should additionally note that the nebulous language that they are trying to leverage as a post-facto non-compete makes no provision as to how long I am to be prohibited from competing against them; i.e. it is their contention that through the severance agreement I am to be barred indefinitely from ever working in our respective field and that they essentially 'own' me. Finally, it has also come to my attention that at least one employee from my former employer has made disaparaging remarks about me to past clients. I addtionally suspect (and unfortunately I cannot prove this concretely as of yet) that the company has essentially launched a campaign to slander and defame me within the industry.

My two questions are:

1) Based on the above, would my former employer's tactics to try to leverage the "confidentiality" clause in the severance agreement as a post-facto non-compete hold up in court?

2) If I am able to concretely determine that my former employer is making slanderous and false statements about me, do I have cause to sue for monetary damages or (at minimum) get them to cease and desist?

2 answers  |  asked Jun 10, 2010 07:29 AM [EST]  |  applies to New York

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Answers (2)

John Upton
I agree with Ms. Valentine that whether or not the "confidentiality" provision bars you from competing depends on whether there is some interpretation of the language that you signed that is consistent with that idea. Hopefully, it isn't.

Defamation is the knowing and false statement of fact about somebody which causes damages. Therefore, if the statements that were made were statements about the quality of your performance, or other "opinion" statements, they were probably not legally defamatory. If, however, they were statements that you stole something, did some act which they know you did not do, or some other reference to a specific act, then they might be defamatory.

I agree that the issuance of a letter to the employer threatening legal action should be done. Whether or not the statements were actually defamatory, such a letter would presumably discourage continued statements.

John Upton, Esquire
212-233-9300 begin_of_the_skype_highlighting              212-233-9300      end_of_the_skype_highlighting

posted by John Upton  |  Jun 10, 2010 08:38 AM [EST]
Jeanne M. Valentine
The langage of the confidentiality provision needs to be reviewed line by line. Based on the information you have provided, it appears likely that the former employer may not prohibit you from competing in the field under the provision but it depends on what you agreed to in the severance agreement. You may never use confidential and proprietary information belonging to your former employer even without a contract, but you cannot be prohibited from ever working in the industry again after termination. The release you signed will not operate to bar a defamation claim after the date of the release, but you will have to prove that you suffered actual monetary damages as a result of the false statements to have a valid claim. Of course you can send a cease-and-desist letter. Feel free to call my office and set up a consult so we can work on this together if you want to go forward. I will be available to talk to you tomorrow. Best of luck to you.

Jeannie Valentine
The Valentine Law Office PLLC
845-497-5010

posted by Jeanne M. Valentine  |  Jun 10, 2010 08:00 AM [EST]

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