Non-Compete

Hello,
Background:
I had to sign a Non-Compete Agreement in order to work at my previous company. I had told the owner that I was uncomfortable signing it, but he said it was just part of the "new hire process". After I worked at that employer for 2.5 years, I quite because of health reasons. My employer sent me all over the tri-state area and for over 9 months I was not living at home but in a hotel. At that point my health was affected and I started to get "panic attacks". I saw a doctor and the doctor told me to get a more stable job that would not require travel. I told this to my employer and at that same time a client called and specifically requested me to work on a 1-year project at their site. My employer turned the job down because the client would not pay the requested hourly rate. I told my employer I needed a project like this that would not require travel. He still said no, and I was no working in NYC and CT every week. After two months the client contacted me directly and asked if I would like to work for them. I told them I would consider it.
I quite my job and started my own company working locally in my hometown. At the same time I discussed working with the client and we started contract negotiations. Their attorneys reviewed my "non-compete" agreement and said there would be no problem.
I had a new role at the client as "Project Team Lead" and had 5 other consultants report to me to do the project. My previous employer found out I was working there and has threaten to sue based on breach of contract. They said I disclosed company information and solicited business with a former client.
I never used any of the company information or instruction.
Question:
Do they have a valid case?

1 answer  |  asked Sep 24, 2001 12:02 PM [EST]  |  applies to New York

Answers (1)

David M. Lira
Non-COmpetes and Starting Your Own Business

The short answer is that I don't know whether your former employer has a case. It depends on the industry you work in, the type of work you performed for your former employer, especially compared to the type of work you now do, and the wording on the employment agreement.

I can tell you this. These agreements seem to be increasingly common in the IT area, but I have not really noticed a lot of litigation in the area. A lot of times, the employer seems to be over-reaching.

I can also tell you that courts in NYS have a special dislike for non-compete provisions, because they have a tendency to make people unemployable. Unless you former employer essentially paid you a day's pay for each day the non-compete takes you out of the market, chances are that you would win a lawsuit based on a non-compete.

But, as I usually tell people who have me review non-competes before they sign it, if you sign a non-compete, you are in all likelihood buying a lawsuit. You'll probably win the lawsuit, but it will cost you the money spent on hiring an attorney to defend you.

If you are in an industry where these have become popular, the only way to make them go away is to be willing to fight them.

Non-competes seem to get very popular among employers when a particular job becomes hard to fill, and there seems to be a lot of movement by potential employees among competing employers.

posted by David M. Lira  |  Oct 1, 2001 1:53 PM [EST]

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