NYS Non-Competion Agreement and Former Employer

I've been working for a tool distributor (Employer A) in NYC as an IT professional for nearly two years and I have decided to change jobs, returning back to a former NYC employer, a cosmetics manufacturer (Employer B) also as an IT professional. Employer B coincidentally purchased goods from Employer A twice in the past 6+ years (a total of $250 worth with the last purchase back in October 2000). Employer A makes roughly $25 million-$30 million in annual revenue. To avoid a conflict of interest, I checked my confidentiality agreement and found the one provision that needed analysis.

>>For a period of one year after my employment terminates, with or without cause, I will not: (a) solicit as customers nor sell similar products of any kind or nature whatsover, to customers of (Employer A) and (b) disclose the identity of, or take away or attempt to take away from (Employer A) any sources of supply or business, directly or indirectly, utilized by (Employer A) during my employement hereunder.<<

My interpretation is that I would not be violating the terms of this provisions because 1) there is no explicit provision preventing being employed by customers of Employer A, 2) the purchases of Employer B are extremely small and in the distant past and 3) my position in Information Technology does not interact with the business of selling tools. But is my interpretation valid or should I be concerned of a conflict of interest, even under these circumstances?

Thank you.

1 answer  |  asked Jun 3, 2002 10:25 PM [EST]  |  applies to New York

Answers (1)

David M. Lira
Non-Competes in IT

I cannot provide specific legal advise in the context of this website. If you want to discuss your specific situation, you'll need to call me.

In general terms, non-compete provisions have become very common among IT professionals, probably because IT personnel are so difficult to retain these days. It seems there is always a better offer from someone else.

When employers start to use non-compete provisions frequently, they are not doing so because it is standard procedure, and certainly not to help you. The frequent, indiscriminate use of non-competes by employers is designed to impede the career advancement of employees.

Non-competes are negotiable. My standard advise when faced with a non-compete is DON'T SIGN THE AGREEMENT. You can get a better offer elsewhere.

New York courts are not very receptive to non-compete agreements, at least in the employment context. In lawsuits on the enforcement of non-competes, employees win very often. But to win, employees may have to spend a lot of money on legal fees. The costs are so high, employees are usually financially better off turning down a job offer with a non-compete and waiting even months for one not involving a non-compete.

The good news is that employers also have to spend a lot of money trying to enforce non-competes. Because they know that, and because they also know they will likely lose, they often decide not to enforce non-competes. They include it just to scare and confuse employees.

See the ethical problem. An employer gets an employee to sign a provision the employer knows is probably not enforceable, and the employer even knows it will never enforce it. It's just a lot of legal trickiery and dishonesty. Do you really want to work for an employer like that?

posted by David M. Lira  |  Jun 4, 2002 09:19 AM [EST]

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