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Non-Compete Clause

Discussion in 'Chit-Chat' started by stinkyfj60, Jul 21, 2005.

  1. stinkyfj60

    stinkyfj60

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    Does anybody know whethere or not a "non-compete" clause holds up in a court of law, especially in CO? My employer wants us to sign one that we cant compete in a 100mi radus. Honestly, how can that hold up if you are asking people to to give up their ability to make a living.
     
  2. PHBeerman

    PHBeerman

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    Perfectly legal. Especially if you take a severance package.
     
  3. bkfj40

    bkfj40 SILVER Star

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    yep, they'll stand up, especially since it is only 100 miles....make sure you get a good severance package.....

    on the other hand, I never signed one, but I'm sure my previous employer didn't really like me starting up my own engineering firm in the same town :)

    bk
     
  4. Lito

    Lito

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    They do hold up, but the radius can be an issue. If the radius is too large, it can sometimes be argued to be a restriction of trade. For my profession (medical) I've seen 3-5 mile radius hold up, and 10 mile radius be judged a restriction of trade and therefore useless. If you think you may open up on your own, get an attorney to look it over, its worth it. Also, check on how long your contract is valid, some will automatically be considered to be in effect as long as you are employed, others need to be updated.
     
  5. macneill

    macneill Rollin’ on 33s

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    Ditto. Unless of course you had it contractually not applicable before you took the job.
     
  6. gulp3000

    gulp3000

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    They can hold up, but the employer has to choose to pursue it and it can be a long and expensive process. Most employers are worried about you taking trade secrets, customer lists, pricing info, and so forth, more than worried about you working in the same industry.

    I would try to get out of signing it unless they offer you something good in return. As an employer it's a great idea to have these in place, as an employee, they stink unless you can use it to leverage more pay, better departure package, etc.
     
  7. stinkyfj60

    stinkyfj60

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    Well we are just insurance agents in a small town medium sized agency, but my boss has become the BIGGEST dick in the world.

    We have a contract and I made sure I have a copy when we first got hired. No non-compete in it. But now he wants one (after 5yrs of employment for most of us). Odd.
     
  8. e9999

    e9999 You want to do what...? Moderator

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    I don't get it.
    You're asking if these would hold in court. Surely this is not cuz you would sign it and then not respect it, right?. So what's the problem? Either you sign it and respect it, or don't sign it. Nobody is forcing you to stay at your current job if you don't like the associated restrictions...
     
  9. PHBeerman

    PHBeerman

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    Say no. Tell him you have worked for him for 5 years and he has been more than compensated for the costs associated with training you.
     
  10. stinkyfj60

    stinkyfj60

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    Cause I am curious! I just kind of wonder about the legallity of all this, especially if it become a "sign or else" situation. There are 6 employees, 2 will gladly sign to keep the hue of brown on their nose nice and rich. One will sign because the poor thing is uneducated and not very bright... the other three (me included) will fight it...
     
  11. e9999

    e9999 You want to do what...? Moderator

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    If you're asking if these are legal for your boss to ask you to sign, that's a different issue than signing and then fighting it. IMHO, he should be able to ask you to sign it and you should be able to refuse and take your lumps. Still a more or less free country...

    Whether he could fire you for refusing to sign is something that could be adjudicated in court, I guess, but it sure ain't worth it in my opinion, you gonna stay there agaisnt the guy's wishes...?

    (Unless of course the original contract you signed is such that you both agreed that further restrictions can't be added later on, etc. If that's not covered, than all is on the table.)

    -Note: I have no legal expertise, obviously-
     
  12. TJDIV

    TJDIV Back in The U.P.

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    Do NOT sign it.

    After 5 years you can't be expected to sign a non-compete clause. If you're terminated because you chose not to sign it you can take HIM to court.


    Unless he provides proof that he is concerned about YOU going elsewhere and becoming a liability (very hard to do).


    I signed one once. The company that typed it up for us (their attorney) typed it up for Escambia County Alabama. ****ing idiots. So I signed it.

    There is no Escambia County in Alabama.

    Don't sign it. It's worthless bullshit to him as an employer and he's playing the control card.
     
  13. e9999

    e9999 You want to do what...? Moderator

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    I think I would politely explain that you do not plan to ever compete with him, and that you have been a trustworthy employee, but that you have questions about signing it as a matter of principle (if that is true, of course). See what he says.
    If he still insists you should refuse if that's how you feel.
    If he fires you for refusing, this may or may not be legal. No idea. In the latter case you can fight it.
    But if he has any brains, he won't fire you for refusing to sign. He'll fire you in a while for inadequate performance or excess employee capacity...
    If it gets to a fight, why stay there?
     
  14. semlin

    semlin discouraged user

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    if you sign one do not negotiate or argue about if it is broad. the more broad and unreasonable the better, both as to distance and scope, because it is less likely to be enforceable. the less discussion you have about it the better so it will not look like a negotiated agreement between the parties but something foisted on a vulnerable employee.

    You could call his bluff. As an ongoing employee he can't unilaterally require you to change the contract. However, as your employer he can always dismiss you at any time for any reason (unless you have a fixed term contract) and pay what severance you have owing.

    if he makes you sign it without providing any benefit or incentive for it, then in Canada at least, it would not be binding because there is no consideration for you to amend the contract. In the US they might consider not being fired as consideration, so be careful with that one.
     
  15. BLKDOG40

    BLKDOG40

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    probably varies state to state. Microsoft sues over hiring Former exec joins Google to open lab
    "In California, non-compete agreements are unenforceable, according to Michael McCabe, an employment law attorney in the San Francisco office of Reed Smith. Workers can join any firm they want, even a rival, he said. But as part of an employment contract, employees can be prohibited from sharing trade secrets and trying to steal customers after changing jobs, he said."
     
  16. stinkyfj60

    stinkyfj60

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    Thanks for all the imput, I will probably stand my ground and not sign it or sign it with no intetention to honor it. My boss has gone off the deep end since last summer, but I am in a small rural area and my pay isnt too bad for here so I am being cautious with my options.
     
  17. e9999

    e9999 You want to do what...? Moderator

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    :eek:
     
  18. hodag

    hodag

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    Check with a lawyer. I checked with a buddy of mine who is a tax lawyer here in Nebraska. They dont hold up, or are hard to enforce. When I left my company I took my customer list with me. I probably brought 60% of them to my new company (LP business). Not only did this make me popular with the new company, but really pissed off my former employer (fawk'em anyway).

    Hodag
     
  19. Cruisin'Carolina

    Cruisin'Carolina

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    Do some research on the net. (or is that what you call this?)

    My company did that a few years back. That situation was different, because in some states they cannot enforce it without adequate compensation.

    I think in a licensed profession (I'm the same as you), the radius has to be fair, the compensation has to be fair (read NOT FOR FREE, they have to offer to pay you for your time if you are not working elsewhere), etc....Read up about it.

    One of my co-workers was told not to sign it by his lawyer. The other was told to sign it and forget about it, it was not enforceable.

    If you like your job, I wouldn't worry about it too much, except it sounds like your boss is turning into a dickmunch.
     
  20. Bama_B

    Bama_B

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    As previously stated, its legal but kinda shady that he would ask you to sign now. The 100 mi may be a stretch though, especially considering you are in a smaller sized town. Hold out and see where it goes, especially if its half the staff standing with you. In the insurance game, I would imagine that most of your income is tied to sales and not what your assmunch boss thinks of you, so you have some leverage.


    TJDIV,

    You may have gotten yourself into a crack. There is an Escambia County, Alabama. You, however, live and work in Escambia County, Florida, so if you leave your company, you cant work in Brewton, AL but you can stay in Pensacola and screw your employer as long as you like.