Non compete gives me little choice in employment

I signed a non-compete upon employment with an evaluation company 3 years ago (appraisals, evaluations, ect..) and worked in the Quality Assurance/Control aspect of the business. I had never spoken with a client directly. I reviewed products completed by vendors (appraisals and BPOs by Agents and Appraisers) that were independent contractors to the company ordered by the client based on client requirements, so each one I reviewed was client specific. We were the middle man that helped protect the client from conflict of interest if they were to contact vendors themselves for the products. There is a new company that offers identical products to the prior company, very large as well, however also offers positions of other services not offered by the current company (such as Asset Managers), but in the same field (real estate valuation). I am would not ever try to get the new company to take any business from the previous company directly (meaning I wouldnt solicit but if because I was there and quality improved and the client chose to move themselves that would be different) and I don't have any trade secrets since evaluation principals are standard across the board and mostly governed by HUD and other goverenment agencies. I didn't learn anything that I didnt already have knowledge of other than how to navigate thier operating system which is thier own and no other company would have access to, but I would have no clue how to set something like that up. Either way, I would not mind taking one of these other positions if it meant the Non-compete would not be enforceable (and other previous employees have taken the exact same other positions with other companies without litigation) because the position I would take would not be something offered by the first company to begin with, but my expertise in Quality Control could get me a higher wage for sure. I left because this company did not offer very good benefits for being so large and did not receive a pay increase for 3 years, even after asking for one (and I was a TOP producer). They also said there would be plenty of room for advancement and I was specific in my questions upon employment but never received any type of opportunity for advancement whatsoever. Anyway, if you would like, I could post the whole non-compete agreement, but in short it is 12 months (it has been a couple since and I left on my own accord) and any state of the US that the current company has clients in (meaning ALL states), this is a very large corporation (fortune 100), and the company cannot directly or indirectly be in the same business (very broad) but it goes much deeper into detail of what those businesses are and how they would relate. I am sure this is overly broad geographically, but even with lowered geographic specifications, the new company is within 10 miles of the prior. Is there anything I can do without having to totally relocate myself and family or if that would even help? This is the only field I have been in for the last 8 years. My experience is what will give me a competitive advantage in positioning myself for a better job, but with this non-compete, I basically cannot do anything for a year unless I totally change fields. I am willing to consult an attorney if need be, but I am limited in what I can afford (as I am unemployed currently). I am so very against these types of contracts and will surely never accept to sign one again. It is pretty much like they want you as their employee and no one else can have you, even if they don't want you or want to compensate you fairly (as I see it). I would have happily stayed if I was treated with respect and compensated based on my performance. Is there any advice at all that you can give? I can repost more info about the agreement if need be.

1 answer  |  asked Feb 6, 2007 9:34 PM [EST]  |  applies to Pennsylvania

Answers (1)

Christopher Ezold
Working in a different position may avoid the noncompete problem entirely.

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, working in a different position may avoid the noncompete problem entirely. In Pennsylvania, a noncompetition agreement must be reasonable in its time limits (1 year is reasonable), geographic limits (if the employer actually does business in all 50 states, a national restriction is likely to be reasonable) and in substance. Before you reach the question of whether the agreement is reasonable, the agreement must pass the threshold question of whether the employer has a legitimate business reason for the noncompete. Merely competing with the employer is NOT a legitimate business reason. Instead, the employer must be protecting its trade secrets, investment in training, or the relationships you have formed for the employer.

Under the facts you set forth, it appears that there is no legitimate business interest in preventing you from working in a different position in a competing organization, especially as no such position is available with your employer. You have no relationships to protect, there are no trade secrets to protect, and you do not appear to have expensive training provided to you by your employer. Furthermore, the courts will balance the harm to you versus the harm to your employer; in this instance, you appear trapped in a dead-end with your employer, while your working in a different position with a new employer appears to pose no real threat to your employer.

These issues are very fact-dependent; my statements above are preliminary at best. I would need to know more about your issue to give you a reliable opinion.

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/
Nancy O'Mara Ezold, P.C.
One Belmont Avenue,
Suite 501
Bala Cynwyd, PA 19004
(610) 660-5585
Cezold@Ezoldlaw.com

posted by Christopher Ezold  |  Feb 7, 2007 08:36 AM [EST]

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