Non-compete release or compensation
Non-compete. If I am offered a job by another company in the Phoenix area that is "covered" by a non-compete and the job offers a better living situation than present, is there a law that either requires my former employer to either release me from the non-compete or match the better offer?
I am presently out of work but have an a possible oppertunity with another competing company.
Answers (1)
Ex-employer is not obligated to offer job
The purpose of a non-compete agreement is to prevent you from going to work for a competitor. If the non-compete is valid, your former employer is entitled to the benefit of the agreement, even though it means you cannot accept a desirable job offer from a competitor. If the employer were required to release you, the agreement would be meaningless.
Having said that, I would add several things for your consideration. First, non-compete agreements are only valid and enforceable if they are necessary to protect legitimate interests of the former employer. Second, they must be reasonably restricted as to time and geographic scope. Third, they are strictly construed by courts, and you should not assume that the terms of the agreement apply to anyone who appears at first blush to be a competitor. In deciding such questions, courts will construe the agreement narrowly, so that the agreement doesn't unnecessarily prevent you from working within your profession. Finally, it is not a crime to breach a non-compete agreement. The ex-employer has the burden of taking whatever steps are necessary to enforce the agreement, and often employers choose not to incur the expense of a lawsuit if you don't present a true competitive threat.
I would suggest that you have an employment attorney review the agreement before you assume either that it is enforceable or that it applies to your prospective employer. Predicting what a court will do with such an agreement is very difficult, but there may be sound legal reasons to assume that the agreement is not enforceable.
Finally, be sure to inform your prospective employer about the agreement. You don't want to take the new job only to lose it when your former employer threatens your new employer with a lawsuit because of an undisclosed non-compete agreement. This is often the most effective and least expensive way such agreements are enforced, even though it seems like a dirty trick to the guy who loses his job.
posted by Francis Fanning | Jun 26, 2006 3:26 PM [EST]
The purpose of a non-compete agreement is to prevent you from going to work for a competitor. If the non-compete is valid, your former employer is entitled to the benefit of the agreement, even though it means you cannot accept a desirable job offer from a competitor. If the employer were required to release you, the agreement would be meaningless.
Having said that, I would add several things for your consideration. First, non-compete agreements are only valid and enforceable if they are necessary to protect legitimate interests of the former employer. Second, they must be reasonably restricted as to time and geographic scope. Third, they are strictly construed by courts, and you should not assume that the terms of the agreement apply to anyone who appears at first blush to be a competitor. In deciding such questions, courts will construe the agreement narrowly, so that the agreement doesn't unnecessarily prevent you from working within your profession. Finally, it is not a crime to breach a non-compete agreement. The ex-employer has the burden of taking whatever steps are necessary to enforce the agreement, and often employers choose not to incur the expense of a lawsuit if you don't present a true competitive threat.
I would suggest that you have an employment attorney review the agreement before you assume either that it is enforceable or that it applies to your prospective employer. Predicting what a court will do with such an agreement is very difficult, but there may be sound legal reasons to assume that the agreement is not enforceable.
Finally, be sure to inform your prospective employer about the agreement. You don't want to take the new job only to lose it when your former employer threatens your new employer with a lawsuit because of an undisclosed non-compete agreement. This is often the most effective and least expensive way such agreements are enforced, even though it seems like a dirty trick to the guy who loses his job.
posted by Francis Fanning | Jun 26, 2006 3:26 PM [EST]
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