Non-compete
I am currently working for an IT Company in Columbus. I am moving to another state in which my employer does not do any business in that area. They say the non-compete is valid.
NON-COMPETE TERMS:
Cannot work for a competitor for 6 months.
Cannot call on any existing customer for 1 year
Would my non-compete be enforceable if I chose to work for a consulting company in Florida?
Answers (1)
The question is not whether the non-compete is enforceable, but whether you will get sued.
Most courts will not prevent you from working for a competitor in another state that does not involve work for your former employer's customers. Therefore, even though you may go to work for a competitor, and even though you "agreed" you would not do so, most courts will not prevent you from accepting that employment under the above circumstances.
However, the real issue is whether your prior employer will sue you and/or your new employer, its competitor. If so, your new employer may not continue your employment. Even if it does, you will have attorneys' fees of at least $5,000 and likely $10,000-$15,000 by the time a court decides that the non-compete is unenforceable. Generally speaking, you cannot recover those attorneys' fees. Thus, if the risk of owing these amounts to take on the new employment is too great, then the risk of getting sued is your real deterrent; not whether a court will ultimately enforce the agreement.
To minimize this risk, explore with the competitor/new employer whether it will assist you in defraying some of the costs of the non-compete litigation.
Finally, as you likely now know, do not sign non-competes in the future if possible and, if you have to sign something, sign it only after you reach agreement on some limits, such as existing customers in the existing state. You have all of your bargaining power at that point and will likely have some success at limiting the restrictions on your future employment down to something that a court will actually enforce.
Best regards,
Neil Klingshirn
posted by Neil Klingshirn | May 3, 2005 11:55 AM [EST]
Most courts will not prevent you from working for a competitor in another state that does not involve work for your former employer's customers. Therefore, even though you may go to work for a competitor, and even though you "agreed" you would not do so, most courts will not prevent you from accepting that employment under the above circumstances.
However, the real issue is whether your prior employer will sue you and/or your new employer, its competitor. If so, your new employer may not continue your employment. Even if it does, you will have attorneys' fees of at least $5,000 and likely $10,000-$15,000 by the time a court decides that the non-compete is unenforceable. Generally speaking, you cannot recover those attorneys' fees. Thus, if the risk of owing these amounts to take on the new employment is too great, then the risk of getting sued is your real deterrent; not whether a court will ultimately enforce the agreement.
To minimize this risk, explore with the competitor/new employer whether it will assist you in defraying some of the costs of the non-compete litigation.
Finally, as you likely now know, do not sign non-competes in the future if possible and, if you have to sign something, sign it only after you reach agreement on some limits, such as existing customers in the existing state. You have all of your bargaining power at that point and will likely have some success at limiting the restrictions on your future employment down to something that a court will actually enforce.
Best regards,
Neil Klingshirn
posted by Neil Klingshirn | May 3, 2005 11:55 AM [EST]
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