Non-compete with no copy

I had been working part-time as a coach at a local sports school for 1.5 years and received a promotion. 2 months later, I was forced, under duress, to sign a non-compete contract. The owner did not give me time to read and understand the conditions. It was all very rushed. With the owner bringing in new management (for the third time in 1.5 years), I was threatened with losing my job if I did not sign. In fear of being fired, I signed the contract, which the owner took and stored outside of the employee files at the school. I was never given a copy of the contract that I signed and do not have one to this day, although I have resigned from my position due to other issues (i.e. new management). Is the contract valid if I signed it under duress, with management that is no longer with the school, and if I was never given a copy of the contract?

1 answer  |  asked Jul 12, 2006 5:59 PM [EST] in Non-competition  |  applies to Arizona

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Answers (1)

Francis Fanning
Validity of contract does not depend on you getting a copy

It is common for employers to have employees sign contract documents that are then put away in a file and pulled out later when needed. I know of no cases that invalidate a contract simply because the employee didn't get a copy.
A contract entered into under duress can be invalidated. However, signing an agreement with minimal notice, even under threat of termination, is not the same as signing under duress. Legal duress involves something more than disadvantage. If the employer puts a gun to your head, that's duress. Fear of losing your job is not duress because that is what you are bargaining over. You can choose to sign or choose to not work there any more. As unpleasant a choice as that may seem to be, it is still your choice.
The change of management does not change your contractual obligation toward the employer. Nor does the fact the contract was stored off the school premises.
The real issues about enforceability of this contract are 1. Whether it is reasonably limited in geographic scope; 2. whether it is reasonably limited in time; and 3. whether it is necessary to protect the employer's legitimate business interests. I cannot comment on the temporal or geographic scope of the agreement without reading it. But I find it hard to imagine why a sports school would need non-compete agreements for coaches, unless there was a fear that you would leave and draw away students to a competing program.
Another reason the agreement may be unenforceable is lack of consideration. Consideration is something of value given in exchange for a promise. A contract requires consideration to be enforceable. Since your promotion was given to you two months before you signed the agreement, it doesn't seem to qualify as consideration for the promise not to compete. The Arizona courts have not clearly said whether continued employment in a job that is terminable at will is sufficient consideration for a non-compete agreement. A terminable-at-will job isn't something of value that you didn't already have.
I would ask your former employer for a copy of the agreement. Ask in writing and keep a copy of your letter. If the employer doesn't respond, you can at least claim that you weren't certain about the terms of the agreement and assumed the employer wasn't concerned about holding you to it. If the employer responds, you can have an attorney review the agreement to see how reasonable it appears in light of the concerns discussed above.

posted by Francis Fanning  |  Jul 13, 2006 9:05 PM [EST]

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