Non Compete with No End in Sight

(consultation would have to happen rather quickly, like Monday morning! Job came up very quickly, interviewed quickly, etc).

I am a computer profesional that signed a non-compete/confidentiality agreement when I first joined the firm in consideration for employment only (and the contract states that I understood this). The company mereged and the same/similar contract was re-signed in consideration of employment only again. I left (not fired or laid off) the company three+ months ago. I have, in that time, received consulting money from them. I want to start a new job with a competitor (no overlap). My contract has no end date and says I have to notify them of any employment I take so they can decide what to do. Further, with respect to my own personal developemnt "will attempt to work out their interests and mine". Followed by punishment, punishment, punishment clauses. In fact, in the "binding on" section, my heirs are stuck too!

Is this contract enforceable?

1 answer  |  asked Oct 24, 2003 6:33 PM [EST]  |  applies to New York

Unlock Non-Compete Agreements: Keys to Escape

Answers (1)

David M. Lira
Broad, Punitive Non Compete Agreements

Unlike most employment cases, in litigation on a non-compete agreement, the employer is more likely to lose than the employee. THe reason for this is that the courts want people who are able to work, and who can find jobs to be working, and non-compete can prevent that.

Generally speaking, an employer will have a greater likelihood of being able to enforce a non-compete if either (1) the agreement is narrowly tailored to meet the employer's legitimate interests, or (2) the employer agrees to compensate the employee for the time the employee is out of the market on something approaching a day's pay for each day the employee stays out of the market. An employer does not have a legitimate interest in reducing competition, either for customer or for skilled employees. What would be a legitimate interest would depend on the industry, the structure of the employer, and the work performed by the employee.

The big danger in non-competes for employees is being sued. Employees are likely to win the lawsuit, but it would nonetheless cost money and time (and perhaps a job or two) to fight a lawsuit on a non-compete. I usually tell employees who see me before they sign a non-compete that they might be buying themselves a lawsuit.

On the positive side is that, although it seems that an increasing number of employers use non-compete agreements, many employers fail to go as far as actually suing. There is no guarantee, but in many cases an employee can just call an ex-employer's bluff. This strategy works because employers generally know that they cannot win a lawsuit on a non-compete agreement.

posted by David M. Lira  |  Oct 27, 2003 08:49 AM [EST]

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