Is it legal to accept a position in client's office, after signing a non-compete?

My husband signed a non-compete statement at the beginning of his employment. He as recently been offered an in-house position by a client. The client will no longer use his current company regardless of his answer. His non-compete statement states:

"Upon the termination of this relationship, whether by lapse of this contract, or otherwise XXXXXX shall not directly or indirectly, either as an individual, partner, officer, director of shareholder of a corporation or otherwise, solicit, sell or carry on any business similar to that of (employer) for any client of (employer) for a period of twelve (12) months from the date of termination of this relationship within the metropolitan area. Clients shall mean any client using the services of (employer) within the preceding twenty-four (24) months from the date of XXXXXXX's termination."

Is it legal (according to this agreement) for my husband to accept employment with this soon-to-be-X-client?

1 answer  |  asked Jul 16, 2003 8:04 PM [EST]  |  applies to Arizona

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Answers (1)

Francis Fanning
non-compete is really an anti-piracy agreement

The agreement you refer to as a non-compete provision is actually an anti-piracy agreement. It does not prevent your husband from competing, only from taking on clients of the employer. That is exactly what he proposes to do by going to work in-house for a client of the employer. It doesn't matter that the client no longer intends to continue with the employer. Unlike true non-compete agreements that are sometimes deemed unenforceable, anti-piracy agreements are generally upheld, since they protect legitimate employer interests without unduly limiting an employee's professional opportunities.
Going to work for the client is not illegal, it is merely a breach of contract. The worst that can happen is that your husband will be sued for breach of contract, enjoined from continuing to work for the client and ordered to pay damages and attorney fees to the former employer. The client may also be sued for interference with contract. Or the former employer may choose to do nothing, in which case nothing will happen.

posted by Francis Fanning  |  Jul 17, 2003 2:43 PM [EST]

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