Restrict Future Employment w/new Employer
Recently received a severance agreement (which I have not yet signed). Most of it is pretty straight forward. A single portion of the document concerns me.
It states that I will forgo any future severance payout (will be paid on a normal payroll schedule) if I should go to work for Company ABC for a specific period of time after my separation date.
My company recently sold a portion of their "non-core" business to Company ABC and as part of that sale, my company will supply certain services to Company ABC until the two businesses can be completely separated. I (along with others) have been asked to assist Company ABC during this transition. When the separation has been completed, employment with my company will end.
Can my company enforce that portion of the agreement?
Answers (1)
Courts view non-compete agreements with concern because they can often prevent a person from engaging in his or her chosen profession. Unlike most non-competes, which extend to any competitor of the employer, your agreement is limited to one company. I suspect that the courts would enforce it because it is quite limited in scope, and does not prevent you from staying within the industry in which you have been working. I am not sure why your employer finds this provision necessary or helpful, which is a factor that courts consider when considering the enforceability of a non-compete provision. I assume the agreement is merely the employer's way of saying that you don't need severance pay if you go directly from the old company to the spinoff. Since an employer is not obligated to pay severance pay in any event, putting this kind of restriction on the offer of severance is not unreasonable. Nevertheless, it would be prudent to have an attorney review the entire agreement and the circumstances of your layoff before signing it.
posted by Francis Fanning | Dec 1, 2008 5:47 PM [EST]
Answer This Question
Sign In to Answer this Question
Related Questions with Answers