Prohibiting EEs from future work..legalWhile it may not be enforceable, it could create problems. First, it could prevent you from getting another job. Other companies may not want to have to deal with the issue when hiring you. And if you do get hired and the company comes after you, it will be coming out of your wallet to defend yourself. You could be out of work while this happens and even though you may be successful and recoup wages and penalties, it may be a long and difficult road. If your experience has all been within the same industry, enforcement of the agreement could really hurt you. But if you have been an EE in other industries, you may have an easier time getting hired if the worst happens. The general idea behind non-compete agreements is to prevent an employee who learns about somebody else' s business - special processes, formulas, trade secrets, how stuff is made, etc., etc. from going out and taking that knowledge to compete against the former employer by either starting a competing company or working for a company that competes with the former employer. Non-competes generally have to be for a specific time period that' s reasonable and usually within a limited geographic area. In other words, a non-compete which supposedly bars a former employer from EVER working for a competitor ANYWHERE would obviously be unenforceable. Looking at it from the employer' s side, it only makes sense that if you, as an employee, learn how they make something that' s unique, that' s taken years to perfect, and millions to develop, should steal the idea and try to compete with that employer that, within reason, you should be barred from doing that. I can' t offer you legal advice or offer a legal opinion, but if I were you, I' d talk to my lawyer about the agreement. It' s not a matter of whether or not it' s "legal," but a matter of whether it' s enforceable in a civil action if you violate it' s terms. Financeer, it's good to check with an attorney, preferably one who specializes in labor law. I don't know the answer to your question exactly, but my ex-husband is an attorney and I remember him fielding questions about non-compete agreements. I believe his take on this, after doing research, was that a company cannot structure such an agreement so that it would keep you from making a living once your employment ends--causing "undue hardship." He said it would probably be unenforcable, for example, if you are an engineer working in a particular industry, and after your employment ends, the only engineering jobs in your area are in the same or similar industry (like if you work for a shipbuilder in a port city, and the only other jobs are in the shipbuilding industry). You can't be forced to relocate to find work. Usually a non-compete agreement can be enforced if it specifically prohibits you working from a direct, and I mean direct, competitor or if your job would pose a high risk of you revealing trade secrets belonging to your former employer. But, again, it sometimes depends on circumstances. You probably could be prohibited from working for AMD if you left Intel, but not from working for a computer manufacturing company in a similar position. The attorney will know better than I do, for sure! Keep us posted--very interesting situation....
Well, I just got back from the attorney's office. He said that the agreement seems to be "too broad" and unspecific in it's scope of restrictions (industry and competitors). However, with that said, it just may actually hold up in court......but in the end, it's difficult to determine how a judge would rule. I dunno. This thing scares the you-know-what out of me. I have been downsized before, and I would not want to find myself suddenly without a job and unable to work for two years in the only industry for which I am qualified. It's hard enough to look for a work, not to mention having to make a drastic career change at the same time. And then there is the matter of what if I am miserable? What if after years of hard work and dedication I find myself unable to advance anywhere within this firm, but because of this agreement I am literally stuck and unable to get out unless I want to flip burgers for a living? Jeez....this sort of thing ought to be illegal. This is killing me, because I was so excited about this job opportunity and this company, and now all my hopes are dashed. Can you ask for this agreement to be clarified (in writing, of course) and/or amended in scope? You can't leave yourself so broadly at risk if this doesn't work out. Of course, you want to assure this employer that you are planning to be there for the long term, but at the same time, one never knows for sure just what the future holds. The agreement as you describe it is "probably" not one that can be enforced, but like the attorney says, you just never know. I haven' t been involved with a non-compete agreement since the job I worked from 1977 until 1981. At that time they were rather new, and supposedly not holding up in court too well. The last one I would have had was from the Accounting Manager for an Industrial Pump Distributor/Manufacturer position I turned down the end of November. If I had accepted it, I would have had my attorney look the agreement over, too. The ones I have heard about usually don' t allow you to work for a competitor only for a certain time period, and within a certain distance of your home, say 100-200 miles. For example, the company I worked for in the late 70' s was a semiconductor distributor, and I only had the non-compete when I went into Inside Sales the last year and a half I was there, so I was only restricted from going to work for another semiconductor company. My step-son worked 16 years for a well known international Copier/Blueprint Machine company, and had signed a non-compete. He lost his job last winter due to down sizing, and ended up getting a new job six months later with one of the biggest Copier companies in the world. He jokes about them coming after him, but I think they wouldn' t have a leg to stand on since he was let go, and didn' t quit. I have never heard of them being able to demand proof of your current employment with them after you leave. I take it with the EE you are an Electrical Engineer. With what you have stated, it appears that you would just not be able to obtain another position doing that kind of work in your industry: for example, if you you are currently an electrical engineer in a nuclear power plant, you would not be able to work for another power plant for two years. I' d consult that attorney right away to see what he/she says.
I'm sorry, I don't know where the best place to post this question is. I was offered a position at a company. They asked me to sign the typical non-compete agreement. However, this agreement also specifically prohibits me from working in the same industry within a 24-month period following termination of employment. And it also states that after termination they can request that I provide them with proof of my current employment information at any time during that period. Is this legal? I am going to be talking with a lawyer shortly, but I wondered if anyone else has dealt with this. How can companies expect someone not to work in their profession and make living for two whole years? | |
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