T Nation

Non-Compete Employment Contract


#1

Does anybody have any knowledge of these things?

I work for a commercial construction contractor as a salesman. Four years ago I signed a non-compete clause to not solicit any business within 100 miles for 2 years of our office. I was already employed for the company and they gave us a $500 bonus to sign the contract.

I decided to join a competitor in the same position about 4 months ago. My duties changed. at my former company which greatly affected by ability to make a commision. It has been about 4 months and my former employer is unaware that I a working for the competition. I have solicited a few customers that have given me business. I do expect them to find out within the 2 year window of my non-compete. I do have customer lists that I put together during my previous employment.

Is there anything wrong with what I have done? Any advice is appreciated as I am not really farmiliar with these contracts.


#2

In Canada, yes. Depending on the terms of the contract you signed you could get sued.

Companies take "non-compete/non-disclosure" contracts extremely seriously. You really should try and cover your ass here.


#3

If they find out they'll probably sue you for the money you caused them to lose and theyll try for future damages based on the list you have. There may be more issues as well.

How the money issue will be decided depends on where you live and the laws of your state.

Basically youre fucked if they sue you.


#4

x2

...nevertheless, they gotta find out first :wink: So stay bellow radar.


#5

Yeah. Besides breaching the non-compete, you may be misappropriating trade secrets if you're using your former employer's customer lists. You should probably also delete this post....don't go spouting off on message boards....and you should talk to a lawyer.

TALK TO A LAWYER. THIS IS NOT LEGAL ADVICE.


#6

...You're asking if there are repercussions for violating a contract?

Heh heh


#7

Often they aren't enforceable because the language is either too vague or the terms are too constraining and restrictive. A company cannot prevent you from making a living in your industry. I've 'violated' non-competes from my previous two employers and my current employer is the client of my previous employer.


#8

I and several other people I've known have signed those. Virtually impossible to enforce, and any decent attorney could tear one to pieces if push came to shove.

I thought companies quit using those a couple of years ago because they aren't worth the paper they're printed on, but maybe some still do.


#9

I wouldn't take a chance...they paid you consideration in exchange for giving up your right to compete with them. It may or may not be a contract of adhesion. Your former employer may or may not find out, and they may or may not take action if they do find out....but again, TALK TO A LAWYER. You shouldn't be taking legal advice from people on the internet.


#10

My current employer didn't bother with it. My previous employer has approached me with job offers to come back so if they were able to enforce the non-compete I signed I'm sure they would have. They just want you to think twice before doing it and hope you don't realize they can't enforce it.


#11

I know it's wikipedia and therefore 100% falsified lies, but here's a list of different states and their apparent enforcement of NCCs

I'm no lawyer, but I do know that the good people at Novartis pharmaceuticals successfully sued my friend for tens of thousands of dollars for violating a NCC.


#12

highly dependent on state


#13

The first thing you need to do is to disclose this to your current employer. It may be difficult to enforce as to you, but if your former employer makes your current employer a party to any litigation or maybe even has their counsel write them a cease and desist letter, and you didn't disclose this tiny little detail, guess what's going to happen to your job? Also, client lists are absolutely the subject of hotly contested litigation and companies will litigate to protect them. Go talk to a lawyer as suggested. You're in a tough spot b/c of your not disclosing this to your current employer (I'm assuming you didn't disclose it).


#14

My employer can and does enforce and sue for the non-compete contracts. Of course my employer is a fortune 1000 company and their non-competes are basically written in the blood of virgin judges. Iron clad. They only make the big wigs sign them though.


#15

Depends on a lot of things. $500 as consideration? Not enough. They are hard to enforce. Size of your town? 100 miles is a long damn way to say someone can't compete. Basically that means you have to pick up and move in order to work in the industry? Not reasonable. The only thing I see that you did that is potentially bad is making customer lists.


#16

I've been in the same situation, don't worry about it. Do not sell to former customers' that you sold that are from your previous employer that is just evil. Go find new customers and you'll be just fine. People don't go to jail for things like this.


#17

This, as long as you don't start up a company to compete in their markets, most companies do not really care. Unless they are assholes, they'll hire a lawyer, spend lots of money, find out they can't stop you from making a living.


#18

They are good for keeping salesman from starting up businesses in their old employees markets.


#19

A judge will never consider $500 compensation for non-compete.


#20

This, $500 won't go through a judge, a $10 million customer list though, will get you sued.