Non-Compete IT Consulting -> New Firm
The IT Firm I am currently working for is probably going to lose one of their clients (A). I know pretty much for sure that the new company coming into the current client (A) wants to hire all the consultants previously working there before they came in.
I signed a non-compete with my company after being on the job a few months. There is a 6month clause that I cannot work for their clients (A in this case) or for a firm that comes into one of their clients (losing client A).
Consideration was given of 1 week's pay if I am let go due to any reason that they cannot financially retain me afterwards. They definitely will not be able to retain me after losing client (A).
How enforceable is this? Are there any ways to side-step this? What if I am not being paid during the first 6 months with the new firm that comes into client A?
TIA.
Answers (1)
Non-compete clauses have become so common in the IT industry that many employment attorneys have taken to telling clients that it is safe to sign them because employers don't usually enforce them. In New York State at least, employers generally don't enforce non-competes because New York courts tend to not enforce them.
Think about what that shows. The employer is putting a non-compete in front of you, insisting that your sign it, yet knowing that there is a good likelihood that it is not enforceable. Can you really trust someone who is trying to take advantage of you in this way?
When I see a non-compete, and it doesn't matter what industry it is in, I will tell my clients it is probably not enforceable, but there is a good chance they are buying themselves a lawsuit. You cannot rule out that the employer will bring a lawsuit to try to enforce the non-compete. If the employer brings such a lawsuit, you will have to respond in some way, and whatever way you respond, it will cost you a good deal of money, in pay or in attorneys' fees, if not both.
Whether a particular non-compete is enforceable against a particular employee will depend on the wording of the agreement, and the nature of the employee's work as well as the nature of the employer's business.
To side-step the enforceability of a non-compete, you can wait for the employer to sue, or start a lawsuit seeking a declaratory judgment.
Whether you are violating a non-compete has nothing to do with whether you are being paid by a competing employer.
posted by David M. Lira | Nov 5, 2002 08:46 AM [EST]
Answer This Question
Sign In to Answer this Question
Related Questions with Answers