Non-Compete
My employer recently asked me to sign a revised non-compete clause. It changed from 'not working for a competitor' to 'not working for any firm that provides marketing services' within the industry I'm employed; which is pharma/biotech, for 1 year. Also, that I must inform my company of any employer I work for during that period. I'm not comfortable signing this. I've built my 13 year career in this business and I feel it gives them too much control. What options do I have? Not signing I feel will have ramifications by my employer.
1 answer | asked Jan 5, 2003 11:10 PM [EST] | applies to Arizona
Answers (1)
Avoiding non-compete is tough
I must begin by making an important assumption. I assume you are an at-will employee. That means that your employer can fire you at any time without a particular reason. If so, your refusal to sign a non-compete agreement may result in termination.
The agreement itself may or may not be enforceable. First, such agreements are only enforceable if they are narrowly written to meet an employer's need for such protection, and if they are reasonably restricted as to time and geographic scope. A one year agreement may be enforceable, but the employer would have to satisfy the court that such a lengthy agreement is necessary. You did not mention the geographic scope. If your territory with your current employer is limited to a certain state or area, expanding the agreement beyond this area may render it unenforceable. Another issue is the question of an element of a contract known as consideration. This is something of value in exchange for your promise to comply with the contract. If you are already employed and your employer is not giving you anything additional, such as a raise, a bonus or a promise of greater job security, the court may find that the agreement is not a binding contract and refuse to enforce it.
Non-compete agreements are among the most unpredictable when presented in court. I would suggest having an attorney review both the original non-compete and the new one. You may have a better chance of avoiding enforcement of the new one than the original.
The provision about keeping your employer informed of who you work for after you leave is, as a practical matter, unenforceable. If you don't comply, what will the company do, sue you? For what? If you aren't competing with them, they won't have any damages. Whoever dreamed up that provision needs to get a grip on reality.
posted by Francis Fanning | Jan 6, 2003 1:45 PM [EST]
I must begin by making an important assumption. I assume you are an at-will employee. That means that your employer can fire you at any time without a particular reason. If so, your refusal to sign a non-compete agreement may result in termination.
The agreement itself may or may not be enforceable. First, such agreements are only enforceable if they are narrowly written to meet an employer's need for such protection, and if they are reasonably restricted as to time and geographic scope. A one year agreement may be enforceable, but the employer would have to satisfy the court that such a lengthy agreement is necessary. You did not mention the geographic scope. If your territory with your current employer is limited to a certain state or area, expanding the agreement beyond this area may render it unenforceable. Another issue is the question of an element of a contract known as consideration. This is something of value in exchange for your promise to comply with the contract. If you are already employed and your employer is not giving you anything additional, such as a raise, a bonus or a promise of greater job security, the court may find that the agreement is not a binding contract and refuse to enforce it.
Non-compete agreements are among the most unpredictable when presented in court. I would suggest having an attorney review both the original non-compete and the new one. You may have a better chance of avoiding enforcement of the new one than the original.
The provision about keeping your employer informed of who you work for after you leave is, as a practical matter, unenforceable. If you don't comply, what will the company do, sue you? For what? If you aren't competing with them, they won't have any damages. Whoever dreamed up that provision needs to get a grip on reality.
posted by Francis Fanning | Jan 6, 2003 1:45 PM [EST]
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