Non Compete Agreement in New York ( IT )
Hi,
My question is related to Non Compete agreement in NY with IT industry,
Here is background & question I have.
I am an employee of company (ABC) & I am working as a consultant at company (XYZ) through middle company (PQR). I am working with company (XYZ) for last 3 years & as an employee for company (ABC) for last 5 years.
Now company (XYZ) wants to hire me as an employee. Company (XYZ) and company (PQR) has an agreement that after working for 6 months they can hire me without any fee & same contract is forwared by company (PQR) to company (ABC) & they agreeed for last 3 years.
Company (ABC) has contract with company (PQR) that says that company (PQR) can not hire me & I have an agreement (Non Compete) with company (ABC) that I can not join their client directly or indirectly for at least an year after terminating client.
As I am not joining company (PQR) which is client of company (ABC) & joining company (XYZ) which is not direct client of company (ABC) but it is indirect client of company (ABC).
In this situation, Does company (ABC) can still sue me for violating contract? If Yes, then How can I still be able to join company (XYZ)?
Here is my Non-Compete agreement statement.
Employee hereby agrees that during the term of this agreement or any extensions hereof and for period of 1 year from the date of termination of employee’s service hereunder, he/she shall not, directly or indirectly, provide any software consulting services or have any business dealings whatsoever, either directly or indirectly, with (any direct or indirect) contractors or clients of company or any recipient of services of employee or any intermediary parties between company and the recipient of such services, including, such parties that were introduced to employee through company. If any portion of this paragraph is deemed to be unenforceable, then it shell be deemed to be modified to the extent necessary to make it enforceable, The application of this provision does not negate or limit the applicability of any other provisions of this agreement.
Answers (1)
If we make the big assumption that the non-compete is enforceable, I doubt that the precise nature of the relationship between ABC and XYZ will make much of a difference. The non-compete is deliberately written broadly, so that it would likely cover XYZ.
But, I have very serious doubts about the enforceability of the non-compete. NY State courts disfavor non-competes in employment agreements. Although a close examination of your position and the IT industry would be necessary, I doubt the non-compete is enforceable.
Although non-competes have become almost standard practice in the IT industry, I have yet to see a case saying that employment non-competes in IT are enforceable.
posted by David M. Lira | May 28, 2003 10:29 AM [EST]
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