Signed a non compete under duress

I came from digital imaging sales, FOunf a firm in Indiana who offers some of the products in my field. They hired me in June. They did a DMV and credit check prior to starting. Then said you will fill in standard employment documents on your first day. I accepted the job offer. Made plans for 3 weeks, and went to Iniana for 8 days of training. On the first day the HR person handed me the W2 forms and others...then handed me a non compete that I had to sign then and there. What was I supposed to do then? walk out? I didn't have anyway to do that for 8 more days. I signed the non compete under duress. 7 weeks after starting I was layed off for no reason, but told your are gone it's not working out and by the way you can't work in this field for 2 years. I had previous experience in this field for 4 years. Can this be upheld?

1 answer  |  asked Aug 22, 2002 6:08 PM [EST]  |  applies to New York

Unlock Non-Compete Agreements: Keys to Escape

Answers (1)

David M. Lira
Non-Competes Signed under Duress

In answering your query, I will assume that, even though its an Indiana company, you work in New York, and the agreement says nothing about which state's law is to be applied. My answer is based on New York law. Although Indiana law is probably similar, if Indiana law applies, or the law of some other state, my answer might be different.

These non-compete clause have become very common in the IT field, as well as the health care field. They have become so common because employers have a hard time holding onto employees in these fields.

I doubt that the circumstances you describe would be considered duress, but that really does not matter. New York courts tend to look at non-compete agreements involving employees with a good deal of disfavor. Note that I said tend. Under the right set of circumstances, they will enforce them, particularly if you are fairly compensated for the time out of the labor market.

The 2 year duration of the agreement would be considered to be long. Because you are a New York employee working for a company in Indiana, I will assume that the agreement has a national geographic scope. The long duration of the agreement and its broad geographic scope will tilt things in your favor with a court.

Overall, the likelihood is that, if the employer were to sue you over the agreement, you would probably win. But it would probably cost you a fair amount in attorneys' fees to win.

The cost of winning is the reason that I continue to tell employees not to sign these things. The fact that employers are asking employees to sign these things indicates that getting a job in the field is probably easy, so that you could probably easily find another employer not using these agreements.

Here is a little information that tells you a lot about the mind-set of corporate America these days. The information that I have suggests that employers generally do not enforce these agreements. They know they will lose if they try. What does that tell you about the candor of corporate America when they have you sign something they know they can't enforce, and then threaten you with it when they fire you?

A lot of attorneys will tell employees not to worry about these non-competes because employers tend not to enforce them. But no attorney can ever guarantee that the employer will not attempt enforce it in your case.

posted by David M. Lira  |  Aug 27, 2002 09:44 AM [EST]

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