A non-compete clause is an important tool that companies use to protect their confidential and secret business information, as well as their relationships with customers and employees. Employers, of course, want to avoid the hassle of going to court to enforce their non-compete obligations, but if they do, they`d better make sure their non-compete rules stand up to judicial scrutiny. Otherwise, they will learn the hard way, as WorkflowOne did this week with the kind permission of the Federal District Court of Hawaii. 9. Does my employer have to pay me extra money in exchange for a non-compete obligation? Traditionally, companies have used non-compete clauses to prevent high-paid executives from working for competitors of their former employers. Probably not. Most courts have held that an employer involved in illegal activities that result in the resignation of an employee cannot enforce a non-compete obligation against the employee who left for that reason. Many non-compete obligations include a non-solicitation clause, or you may be asked to sign a non-solicitation agreement, even if you are not asked to sign a more general non-compete clause. That depends.
The courts` approach to non-competition clauses varies considerably from state to state. Some states are eager to impose alliances, not compete, and will actively rewrite those that are too broad geographically or temporally to make them more easily enforceable. Other state courts have taken a very negative view of agreements, not to compete with each other, and have applied only those that were geographically and temporally very clearly reasonable and that are supported by substantial consideration (the payment of money in exchange for the agreement). This approach varies from state to state and often depends on the facts of the individual case. Of course, this is reason enough to challenge the employer`s non-compete obligation. Since verbal promises are difficult to prove, try to write them down. Consider emailing your employer asking them to explain the promises. Once this is done, you can easily prove that you have been deceived by accepting the contract. Fortunately for employees, Virginia does not make it easy for companies to enforce non-compete obligations.
Virginia does not have a “blue pencil rule” that allows courts to modify or limit the scope of an unreasonable non-compete clause to make it reasonable. If it is not formulated correctly, it cannot be applied. In such cases, the non-compete obligation is no longer valid. In addition, you have every right to take legal action against your employer. If possible, keep written records of all events that led to the termination. Then, contact an employment lawyer as soon as possible. They can help you navigate complex laws and take legal action. In addition, the employer can claim any actual damages or losses it claims because the employee left in breach of the duty not to compete – this could include loss of customer profits, loss of secret information about the employer, and similar losses. The best thing to do would be not to have a non-competition clause at all. Otherwise, you should try to limit it as much as possible in terms of geographical scope and duration. Narrowly limit it to the area where the employer is really concerned about you working – not to the entire industry or field of work.
For example, you could request that the restriction on clothing retail space apply if you work in a clothing store, as opposed to retail in general, which would cover a very wide range of possible jobs that really have nothing to do with each other. The aim is to limit the agreement to what is necessary to protect the employer. You should also consider requiring severance pay in the event of involuntary termination. Here are some of the ways an employee can overcome a non-compete clause: If you leave a job and have a non-compete clause, it`s best to seek advice from an employment lawyer before leaving. A written agreement with the new employer to defend and pay you even if you cannot provide certain services when a court issues an injunction protects you. If you are sued to enforce a non-compete obligation, you MUST immediately contact an employment lawyer to defend yourself, otherwise you will lose your new job, you will have a pecuniary judgment against you and you will have no opportunity to object to the non-compete obligation. When selling a business, it is typical for a buyer to include in a purchase agreement the requirement that the seller does not carry out the same type of activity in a certain geographical area for a certain period of time. Whether or not these types of non-compete obligations are enforceable, and the extent to which the courts will apply them, varies considerably from state to state. Or, if you have obtained certain confidential knowledge that you would inevitably use in the course of your work for your new employer, a court may consider this a legitimate reason to maintain a non-compete obligation.
Two of the former employees signed the agreement until they took office. The court accepted the timing of this execution by rejecting WorkflowOne`s request to temporarily prevent these employees from recruiting its customers. In the Court`s view, WorkflowOne did not provide adequate consideration beyond its continued employment. The court cited several other courts, including those in Minnesota, Texas, Montana and Washington, D.C., which found that mere retention of employment was not a sufficient consideration to enforce a non-compete obligation that had been entered into after the employment began. A little more was needed, such as additional compensation, benefits or promotion. Whether the employer has provided special training or training as a benefit of employment, to learn more about what to look for when reviewing a non-compete obligation, read What you need to know before signing a non-compete agreement. 15. I left my old business to take a job with a new business. The new company only told me that I had a non-competition clause when I had already left the old job.
Does that mean I`m sticking to it? 22. Is there anything I can do to my employer if they try to enforce a bad commitment not to compete? 16. All of us here at work have non-compete obligations, but the company has never enforced them when someone leaves. Does that mean I can just ignore it? In order to examine the enforceability of the non-compete obligation, the tribunal examines the employee`s professional obligations, the business interests of the company and the language of the agreement to ensure that it does not completely restrict future employment. If a major employee leaves with a business book, contact an employment lawyer immediately to find out what recourse is available. If you want employees to be bound by non-compete obligations, it is best for a lawyer to prepare and review them for the necessary changes at least once a year. An unenforceable non-competition clause is worse than useless – it`s dangerous for the employer trying to enforce it. .
