Are the following statements enforceable in my case?

I signed the following non-compete agreement(NCA), while accepting employment. I had been out of work for 11 months, so I had to accept this.

• Can my employer include "customer" in the NCA?
• Also, while I understand that it says that I have agreed to that I can't take employment for 12 months, will the case hold, if we can prove that the Company does not have any trade secret or know-how that I have used in my current job?
• I am employed by this company,but working as a contractor in a different company, who might hire me directly. I need advice on how to navigate this hiring keeping this NCA in mind? My company has 1-year contract with the hiring company. I don't know what agreement they have with the hiring company.
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I acknowledge that the nature of the Company's business is such that if I were to be become employed by, or substantial involved in, the business of a competitor of the Company during the twelve(12) months following my resignation from the employment with the Company, it would be very difficult for me to not rely on or use the Company's trade secrets and confidential information. Thus, to avoid the inevitable disclosure of the Company's trade secret and confidential information, I agree and acknowledge that, during the twelve(12) month period following my resignation from the employment with the Company, I will not directly or indirectly engage in (whether as an employee, consultant, agent, proprietor, principal, corporate office, director, partner, stockholder or otherwise (except as a passive investment stockholder in a publicly owned corporation) or participate in the financing operation, management, or control of any person, firm, corporation or business that completes with the Company or is a customer of the Company and is located within the state of the principal office of the Company from which I render a majority of my services on behalf of the Company.
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2 answers  |  asked Feb 8, 2011 4:42 PM [EST]  |  applies to Pennsylvania

Answers (2)

Doris Dabrowski
Non-compete agreements are narrowly interpreted. Does your new or prospective employer fit the definition of "competitor"? Did you try to negotiate the terms of the non-compete agreement before you signed it? What was the response? If your employer refused to negotiate terms, you may have an argument about an adhesion contract. To offer advice about strategy, I need to see the complete agreement and details about the operations of the new job.

posted by Doris Dabrowski  |  Feb 9, 2011 09:17 AM [EST]
Christopher Ezold
Before I respond to your inquiry, I must state that we have not spoken, I have not reviewed the relevant documents and facts, and I do not represent you. Therefore, my discussion below is not a legal opinion, but is informational only. Finally, my discussion applies only to issues to which Pennsylvania or Federal law apply, unless otherwise specified.

That being said, I see three flaws in this noncompetition agreement. First, it requires you to 'acknowledge' that you have to use the employer's trade secrets if you worked for a competitor - before you ever know what the trade secrets are! The acknolwedgement is language that supports the 'legitimate business interest' that the employer must prove to the court to have an enforceable noncompete. I don't believe that 'acknowledgement' would be favorably received by most judges, as you cannot possibly agree to what you do not understand.

Second, unless the customer is competing with the employer, it is unlikely that the noncompete would prevent you from working for the customer.

Third, it prohibits you from working in any capacity for a competitor. The lower down the org chart you are, the less the employer is likely to have a legitimate business reason to prohibit you from working outside of the job description in which you performed your work for the employer.

If you would like to discuss this matter further, please feel free to contact me at the below address(es) or number.

/Christopher E. Ezold/
Chair of the Board,
Magellan Leadership Group

The Ezold Law Firm, P.C.
One Belmont Avenue,
Suite 501
Bala Cynwyd, PA 19004
(610) 660-5585
Cezold@Ezoldlaw.com
www.ezoldlaw.com

posted by Christopher Ezold  |  Feb 9, 2011 07:15 AM [EST]

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