Non Compete For Sales Reps? The 135 Top Answers

Quitting a job involves many different steps: giving the boss two weeks notice, handing over the work to colleagues, eating too many cupcakes at the farewell party.

But a common dilemma is whether you need to let people know where you’re going. It’s normal for people to ask, but there are many occasions when you’d rather not say it.

The most important thing to remember is that it’s always okay not to tell people where you’re going. It’s your business and you can keep it to yourself for any reason. That said, avoiding the topic can come across as rude or oddly mysterious, creating negative feelings that might resonate later.

As with so many things at work, whether or not you should say it depends largely on your relationship with your boss and co-workers.

Here’s your guide to deciding if you should share.

Yes, if: Your boss is trustworthy

Are they the kind of boss who has shown they are excited about your success and want you to advance your career? If so, feel free to tell them where you’re headed (and keep in touch for future networking and references).

No if: Your boss is vengeful

A vengeful boss can use their influence to sabotage you in a new place, either spreading industry rumors or going to your new employer and telling them not to hire you (horrible, but it happens). If your boss is like this, stay vague: “I’m considering a few different options,” you can say.

Yes, if: You have a good relationship with your colleagues

If you’re not the gossip type and you know you don’t want to spread private information across the company, go ahead. And enjoy their congratulations!

No if: You go to a direct competitor

Unfortunately, some companies will ask you to leave immediately if you work for a competing company and you cannot calculate your notice period. If you’ve ever seen things play out like this, keep it to yourself.

Yes, if: You become a freelancer

Staying in the industry but planning to work as a freelancer or consultant? If there’s a chance your current company will hire you as a temporary worker, spread the word! It’s a win-win situation.

No if: You cancel without a backup plan

Even if your plan is to happily work part-time for a while, it’s not a good idea to spread the word. If you ever want to get back into the industry, you want to give the impression that you are continually improving your skills and remain valuable.

Tell people you’ll be freelancing, consulting, or something like that: it signals that you’re still a player and they shouldn’t forget you when new opportunities arise.

Most of the time, the decision of whether to tell people where you’re going depends on them – their trustworthiness, their usefulness in the future (perhaps you become a freelancer and they’re in charge of hiring contractors), and how they’ve done in the past dealt with similar situations.

Protecting yourself should come first – if you have any doubts about whether sharing this information could be harmful, keep it to yourself.

What 5 questions should you ask before signing a non-compete agreement?

Over the years, job opportunities have become increasingly aggressive and competitive. Employers have the luxury of being extremely selective when it comes to hiring, and workers may be willing to look into less-than-ideal jobs in order to have a steady paycheck.

However, just because the job market is quite volatile right now doesn’t mean people should make important employment decisions without thinking about the long-term implications. For example, before entering into an employment contract with a non-compete clause, it can be crucial to think carefully about what the clause could mean for the future.

5 questions to ask yourself before signing a non-compete agreement

Who is restricted by the contract? You should understand your limitations as well as the limitations of your potential employer. What options are limited? The answer to this question should include the specific roles or businesses you are not permitted to perform. When does the clause expire? There should be limitations on how long the non-competition clause will be in force. Whether it’s for six months out of five years can make a big difference in your options after you’re hired. Where are you not allowed to work? Some non-compete clauses set limits on future employment based on location. Awareness of these limitations could affect whether a person actually needs to move to find suitable employment when future prospects are limited. Why is this clause needed? Non-competition clauses should only be necessary if they protect a company’s legitimate interests. If the contract appears frivolous, it may not be valid.

Asking these questions can help you understand your options when it comes to deciding whether you should sign the agreement and how you may need to negotiate. In any case, it can be crucial to review the employment contract with a lawyer who can spot potential problems and help both employers and employees avoid costly mistakes.

Source: FindLaw.com, “Non-Competition Agreements: Overview”, accessed 28 April 2015

Many organizations require new hires to sign non-compete agreements before coming on board. Although they cannot legally force you to sign the clause, refusing to do so may affect your employment prospects.

Still, that doesn’t mean you should just sign whatever is presented to you. Before you sign a non-compete clause, you should understand what it is and how it is legally enforced (or not).

What is a non-compete clause?

Non-competition clauses are often found in employment contracts. When an employee signs a non-compete agreement, they undertake not to work for a competitor of their employer in the future. Typically, the non-compete clause describes the conditions under which the clause can be enforced. These include:

Time frame: How long does the non-competition clause apply? Clauses that go beyond two years are less likely to be upheld in court.

Territory: In which geographic region does the non-compete clause apply? Again, greater specificity makes the clause more enforceable. However, this can vary greatly depending on the industry.

Definition of competitors: What counts as a competitor to your employer? Many clauses state the specific industry and may even include a list of companies.

Penalty: how much money do you owe your former employer if you breach the non-competition clause? While this can be enforced, it is also possible for a court to decide that the sum is unreasonable if you get into litigation.

Compensation: What are the benefits of signing the non-compete agreement? This can include both monetary remuneration and benefits such as flexible working hours, further training, etc.

What is the purpose of a non-compete clause?

While it appears that the primary purpose of non-compete obligations is for companies to protect their talent, that is not the legal justification for them. Employees involved in product development often sign non-compete agreements to protect trade secrets. For sales professionals, the purpose of a non-compete obligation is to protect customer relationships. If you build valuable business relationships in your current role, you can’t get a new job at a competitor and invite your clients to switch. Non-competition clauses are intended to prevent this.

Laws on non-compete disputes vary significantly between states. Non-compete clauses are unenforceable in some states, such as Oklahoma and North Dakota, while in California, for example, employers who require a non-compete clause can even be sued. Before signing, find out about the laws in your state.

How enforceable is a non-competition clause?

Like all legal agreements, a non-competition clause is only as meaningful as a court’s willingness to enforce it. If you breach your non-compete obligation, your employer can take the matter to court (although not all do). You probably don’t want to get into a legal battle, but it’s a worst-case scenario when you and your employer have an irreconcilable dispute.

You cannot predict how any particular court will interpret your non-compete clause. However, the courts usually take several factors into account when evaluating a clause.

Generally, clauses that are strictly defined in terms of timeframe, geographic area and industry are more likely to be enforced. Sometimes these factors can influence each other. A court is more likely to enforce a broad scope clause if the period is relatively short.

The court will examine whether the clause prevents you from earning a living. If the clause prohibits you from doing entirely different duties in a new position, it is likely to be less enforceable.

In addition, a company requesting a non-compete obligation must demonstrate that there is compelling justification for the non-compete obligation. If you start a new job, how is your old employer proven to be harmed? Typically, the ability to poach customers is considered a legitimate reason for a non-compete obligation.

In some states, courts must determine whether employees received any tangible benefits in exchange for signing the non-compete agreement, known as “quid pro quo.” Courts may also consider the type of work you do, your length of employment and the specific training you received during your employment.

Going to court over a non-competition clause is a last resort. If a court decides against you, you owe your former employer all penalties described in the clause.

How does a non-competition clause affect my equity?

In many cases, non-compete obligations affect your equity and stock options. These provisions are sometimes referred to as restrictive covenants. A restrictive agreement could state that violations of the non-competition clause lead to a recovery. This means your employer has the right to sue you to recover any profits from stock awards. Alternatively, you could be subject to forfeiture of shares and equity that has not yet vested. This is often one of the most powerful tools employers have to enforce the non-competition clause.

Not all non-compete clauses affect stock/stock options. To determine if your non-competition clause affects fairness, read the section of your contract that deals with fairness.

Does my non-competition clause also apply if I leave my job involuntarily?

In most cases, the non-competition clause will still apply if you are fired or fired. However, you may be able to ask your former employer to waive the clause. In such circumstances, employers are sometimes more willing to waive the clause.

What should I do before signing a non-compete agreement?

Before you sign a non-compete agreement, find out about the laws governing non-compete agreements in your state. Then read the agreement (and the rest of your contract) completely. If possible, contact an employment law attorney who can tell you if there are any provisions that are far outside the legal norms in your state. A lawyer may be able to help you negotiate more favorable terms if you have concerns. In some cases, you may even be able to negotiate to waive the non-compete clause altogether.

If you find yourself in a situation where you may be in breach of the Clause, prior consultation with a solicitor is a necessary precaution.

Non-compete agreements can sound scary, but if you fully understand what your agreement says, you can protect yourself.

Disclaimer: All information provided in this post is for informational purposes only and should not be construed as legal advice. CloserIQ makes no claims as to the accuracy or validity of this information and shall not be liable for any damages resulting from its use. We recommend that you seek legal advice on how this directly impacts your business before taking any action.

So my question is if my current employer can take legal action against me if I accept the job offer coming from an Indian office that was not our client at all?

Some employers may require new employees to enter into non-compete agreements before they start work, and such agreements usually come into effect after the employment relationship has ended. Employers may request non-compete agreements for a variety of reasons, including protection of trade secrets or goodwill. However, non-competition clauses are generally frowned upon by courts as restricting a former employee’s right to earn a living. Therefore, when non-competition clauses are the subject of a legal dispute, they are subject to scrutiny in court.

Non-competition clauses must generally be backed by valid consideration – the employee must receive something of value in return for promising not to compete. If an employee enters into a non-competition agreement before the start of the employment relationship, the employment relationship itself is sufficient consideration for the promise not to participate in the competition. However, if an employee enters into a non-competition clause after taking up employment, the mere promise of continued employment is not considered consideration for the promise. In this case, the employee must receive a different value for the promise. Such additional consideration may consist of a promotion or other additional benefit that was not part of the original employment contract.

Employers have the right to protect their relationships with their customers and their confidential information, but former employees have the right to make a living. If employers and employees have agreed on a non-competition clause, these interests must be weighed against each other.

Employers may not find the guarantee of fidelity under Article 2088 of the Quebec Civil Code sufficient to protect their interests. Consequently, employers can include a non-competition clause in their employment contract, thereby preventing future competition with the employer. The employee’s consent to the inclusion of such a clause renders the agreement binding and prevents competition with the employer even after the employment relationship has ended, subject to legal restrictions.

a) Definition of the non-competition clause

Non-competition clauses are an important and controversial aspect of employment contracts. This clause, often disputed, must take into account certain essential legal elements that are sometimes ignored and sometimes neglected in the drafting and signing of employment contracts.

The non-compete clause in an employment contract is a provision by which an employee agrees not to compete with their employer for a predetermined amount, such as by starting a business in the same industry or working for a competitor after the termination of employment.

First of all, a distinction must be made between the non-competition clause in employment contracts and the non-competition clause in commercial contracts. Each clause requires different formalities and works differently. We will therefore concentrate on non-competition clauses in employment contracts.

Particular attention is paid to non-competition clauses in Section 2089 of the Quebec Civil Code, which provides:

2089. The parties may expressly stipulate in writing that, even after the employment relationship has ended, the employee may not compete with his employer or participate in any capacity in an enterprise that would compete with him.

However, with regard to the time, place and type of employment, the provision must be limited to what is necessary to safeguard the legitimate interests of the employer.

The burden of proof for the effectiveness of the provision lies with the employer.

The case law has addressed this issue on numerous occasions and has provided a fairly exhaustive definition, presented by the Honorable Judge Letarte in the judgment (SNC-Lavalin Group Inc. v. Leboeuf [1994] JQ No. 1262, p. 61):

“The non-competition clause is imposed on those who have made a significant restriction of their freedom. It must not be contrary to ordre public or morality, its application must be limited in time and space, the restrictions imposed must be proportionate to the reasons that justify them; it must not prevent the debtor from earning a living. This non-exhaustive list of requirements justifies the restrictive interpretation that case law has given to its terms.” (Translated from French)

It is important to note that under Article 2089(3) of the Quebec Civil Code, the burden of proving the validity of a non-competition clause lies with the employer. This represents an additional responsibility for the employer as it is necessary to justify the extent of the restriction according to the four (4) requirements described above.

b) Evaluation Criteria

It is important to note that a non-competition clause is not enforceable against an employee if the employer terminates the employment contract without cause or if the employee terminates the contract for cause.

Five (5) factors must be analyzed to determine the validity of a non-compete clause. In fact, the clause must read:

Written

To be valid, a non-competition clause must be expressly included in the employment contract.

limited duration

An employer may not restrict an employee’s freedom for an excessively long time. It is therefore necessary to set a reasonable and mutually acceptable deadline when signing the employment contract. In the past, courts have rejected non-competition clauses longer than two (2) years. Every professional relationship is unique and requires a case by case analysis of the factual framework to determine its validity, so it is important to inform yourself with the help of a competent lawyer!

Territorially limited

Territorial restrictions must not exceed the legitimate interests of the employer, in which case the clause could be declared unreasonable and therefore invalid. For example, an employer that operates exclusively in the city of Montreal could not impose a non-compete clause that would prevent an employee from working elsewhere in the province of Quebec if they left.

The intended territorial boundaries must be specified precisely and unambiguously. To illustrate this point, the courts have rejected expressions such as “and near,” “metropolis of Montreal,” and “the metropolitan area of ​​Vancouver,” the latter ruling coming directly from the Supreme Court of Canada.

Restricted in relation to the specificity of the work/position

Art. 2089 of the Québec Civil Code states that the non-compete obligation must be proportionate to the nature of the prohibited work. The restriction must serve a legitimate purpose, such as protecting trade secrets or confidential information. However, an employer cannot prevent an employee from using his skills, knowledge and experience for the benefit of another company.

For example, a non-competition clause preventing a waiter from working in the food industry would be excessive and inappropriate, so the clause could be removed entirely.

proportionality

Finally, restrictions under Art. 2089 of the Quebec Civil Code must be proportionate to the purpose sought by the inclusion of a non-compete clause in the employment contract. In fact, this criterion is included in the analysis of the factors of time, territory and type of work.

Indeed, the importance and gravity of the grounds underlying a non-compete clause affect the court’s tolerance of the restrictions imposed on a company’s employees.

A look at the pharmaceutical sector, where research and development costs can run into the billions, is sufficient to gain insight into the rationale for including a non-competition clause and the proportionality of the intended restrictions. It is important to protect the knowledge and intellectual property that is so dearly acquired. Such circumstances lead to greater tolerance on the part of various courts, which then adapt their assessment to the context, the business field in which the disputing parties operate and the importance of the affected employee’s position.

Criteria for Assessing Appropriateness

Here are some of the factors courts consider when assessing the reasonableness of a contested non-compete clause:

Inform your new employer about your existing non-competition clause

Yes, but you should be informed if you do. This is important because you want to make sure that you make your new employer aware of any issues they may face as a result of your current non-compete obligation, as these obligations follow after you leave your current employer. For example, depending on the terms of your non-compete agreement, it may dictate restricting the type of work you do in your next job and/or the number of clients you bring with you to a new employer. If these or other things really pose problems for your new employer, you should proactively alert your new employer to the possibility. Of course, you don’t want your new employer to be the first to know about your non-compete obligation when they receive a cease and desist letter from your current employer. Aside from causing your new employer a headache, if the new employer finds it easier to let go, it can reflect badly on you and – in the worst case – result in you losing your new job.

What if my non-compete clause suggests restrictions that prevent me from taking a new job?

Any non-competition clauses will try to limit you in your future position. If you give your new employer the opportunity to assess the non-competition clause beforehand, your new employer can assess for himself whether he sees potential risks and whether these risks are worth taking. Depending on the value you can bring to the new employer, they may be willing to negotiate with your current employer to sort out any issues up front. Alternatively (and as mentioned in our blog post from last week), if you work in the financial industry, the broker recruitment protocol (the “Protocol”) [1] may apply, which may ease your transition from one job to the next and Determine immediately what steps you can take and what tasks you can take on at your new employer.

I don’t want to worry my new employer unnecessarily, so how do I address the issue?

One way to approach the problem is from an informed perspective. In most cases we can review your relevant documents and assess your situation for a flat fee to tell you where you stand and help you strategize how best to present the non-compete obligation to your new employer. If you would like to discuss your situation with us, you can always call or email us. You will be on the phone with a lawyer within 24 hours.

references

[1] https://www.investmentnews.com/step-one-withdraw-from-the-broker-protocol-76905

abstract

The implied tone of the majority of management articles on the subject is that non-competition clauses are “bad”, and some scholars even use the term unethical (e.g. Bishara & Westermann-Behaylo, 2012). But are such agreements really unethical? I maintain that non-compete agreements are themselves ethical, but I recognize that there are circumstances in which a non-compete agreement may be unethical. An employee non-compete clause is, in my view, ethical when appropriate given the specifics of the arrangement, including (i) who qualifies as a competitor; (ii) what activities would be considered competitive; (iii) where such competitive activities should be prohibited; (iv) when competitive activities are prohibited; and (v) how the parties reached such agreement. This criterion is roughly the same as that for determining when non-competition clauses are legally enforceable. I begin this normative analysis with a definition of the non-compete clause and a brief legal introduction to the issue of the employee non-compete clause. Next, I compare and contrast two situations in which non-compete ethics appear to differ in order to develop an overarching theory of what constitutes an ethical non-compete for employees. I then examine the normative ethical principles affected by non-competition clauses and conclude with a brief discussion of open questions and future research approaches.

What is a non-competition clause?

A non-competition clause is a statutory agreement or clause in a contract that stipulates that an employee may not compete with an employer after the end of the period of employment. These agreements also prohibit the employee from disclosing proprietary information or secrets to any other party during or after employment.

Many contracts provide for a certain period of time during which the employee may no longer work for a competitor after the employment relationship has ended. Employers can require workers to sign non-compete agreements to maintain their place in the marketplace. Those required to sign these agreements may include employees, contractors, and consultants.

The validity and enforcement of a non-compete clause varies by jurisdiction and may require the former employer to continue to pay the former employee a base salary during the period of the non-compete clause.

KEY FINDINGS A non-competition clause legally requires a current or former employee not to compete with an employer for a period of time after termination of employment.

Under such an agreement, the employee may not disclose trade secrets obtained during employment.

These contracts specify how long the employee must refrain from working with a competitor, geographic location and/or the market.

Some states, like California, refuse to enforce non-compete clauses.

Non-competition clauses can prevent workers from getting a job in their field if they quit a job.

Understand non-competition clauses

Non-compete agreements are signed at the beginning of the relationship between employer and employee. They give the employer control over certain actions of the employee – even after that relationship has ended.

These agreements contain specific clauses stating that the employee will not work for a competitor after termination of employment, whether terminated or terminated. Employees are also prevented from working for a competitor even if the new job would not involve the disclosure of trade secrets.

Some of the terms of the contract may include the length of time the employee is bound by the non-competition clause, geographic location and/or market. These agreements may also be referred to as “non-compete obligations” or “restriction agreements”.

Non-competition clauses ensure that the employee does not use the information obtained during employment to start a business and compete with the employer after the job has ended. It also ensures that the employer retains its place in the market.

Non-competition clauses should be designed to protect the best interests of the employer and the employee.

Industries that use non-competition clauses

Non-competition clauses are common in the media. A TV station might have legitimate concerns that a well-known weather forecaster could siphon off viewers if they started working for a competing station in the same area. In most jurisdictions, this would be considered a reasonable ground for signing a non-compete agreement.

Non-competition clauses are also common in the information technology (IT) field, where employees are often accused of having proprietary information that may be deemed valuable to a company. Other places where these agreements can be found are in the financial industry, the corporate world, and manufacturing.

In California, non-compete agreements are unenforceable, and if your employer asks you to sign an agreement, you can sue them.

Legality of non-competition clauses

In the US, the legal status of non-competition clauses is a matter of governmental jurisdiction. States vary widely in their enforcement and recognition of non-compete agreements, and many state legislatures have recently debated and updated legislation related to non-compete agreements.

Non-compete clauses cannot be enforced in North Dakota and Oklahoma. California does not recognize non-competition clauses at all, and an employer who retains an employee post-employment may be sued. Hawaii banned non-compete obligations on high-tech companies in 2015. In 2016, Utah changed the law, limiting new non-compete clauses to just one year.

Most states adopt some sort of standard that a non-compete clause must not be outrageous in time or geography, and should not materially restrict a worker’s ability to find employment. However, legal systems differ greatly in their interpretation of which provisions of a non-competition clause would be unduly onerous.

Non-competition clause vs. non-disclosure agreements

Non-compete agreements are distinct from non-disclosure agreements (NDAs), which generally do not prevent an employee from working for a competitor. Instead, non-disclosure agreements prevent the employee from disclosing information that the employer considers proprietary or confidential, such as B. Customer lists, underlying technology or information about products under development.

Advantages and disadvantages of non-competition clauses

Non-competition clauses have advantages and disadvantages for both employers and employees. These agreements can protect employers from employees moving to a competitor and sharing proprietary information. That being said, agreements should be fair to both the employee signing the agreement and the employer issuing it.

A non-competition clause should not discourage employees who plan to remain in a job or who value being entrusted with valuable information. But employees who sign non-compete agreements may leave their industry altogether if it is too difficult to find a new job after signing.

Benefits Protect trade secrets and proprietary information

Can inspire more innovations from employees who sign them

Employers can use non-competition clauses to work with employers looking for long-term positions. Disadvantages Non-compete agreements weaken employees’ bargaining power

Employees may have to wait a considerable amount of time before applying for another position in their field

Few benefits at work for signing a non-compete agreement

Frequently asked questions about non-competition clauses

Can you get out of a non-compete agreement? Maybe, but going to court may be necessary. It is advisable to contact an attorney when trying to get out of a non-compete clause.

What happens if you break a non-compete clause? If you breach a non-compete clause, you could theoretically be sued. State law (and it differs from state to state) determines the enforceability (or not) of non-compete obligations.

How do you negotiate a non-competition clause? If you are offered a job, you may be asked to sign a non-compete agreement as part of your terms of employment. If you wish to negotiate this, you should contact an employment lawyer. Talking to the company’s HR manager about your concerns is another way to open the door for negotiating your agreement.

How long do non-competition clauses last? Non-compete laws vary from state to state, and the duration must be deemed “reasonable” by the courts. Non-competition clauses could last two or three years, but the duration would be up to the company and its enforceability would be up to the courts.

The final result

Signing a non-compete agreement may not always be in your best interest, but it is usually in the best interest of your prospective employer. Talk to an employment lawyer before signing one, and consider the possibility that you may have difficulty finding work in your area if you leave your position.

Not all states adhere to non-compete agreements, but some do, so it pays to know in advance how a non-compete agreement might affect you if you quit your job or break your agreement.

When you quit a job, some employers say you can’t work for a similar company for a period of time. They might also say that you cannot start a business that competes with theirs.

Your employer may want to limit your next job if you could take their clients away or if you know sensitive information.

Your contract could next restrict what you can do, but your employer can only do so if it is necessary to protect their business. If your contract says nothing, you can take any job you like.

Check if any restrictions apply to you

Look in your contract or terms of employment for phrases like “You can’t work for a competing company if it’s less than 10 miles away.” It should also state how long the restriction lasts – usually 3 to 6 months.

Restrictions like these could be under a heading that reads “restrictive agreements” or “post-termination restrictions.”

Usually you have to follow such restrictions if they are written in your contract. This includes restrictions in other documents you sign, e.g. B. an agreement to settle a dispute with your employer.

You can work for whoever you want if there are no restrictions in the documents you have agreed to

If you are unsure about something in your contract, contact your nearest citizen advice service for help. Bring your contract with you when you come to an appointment.

If you do not have a written contract

It is very difficult for your employer to claim that a verbal agreement contains a restriction on who you can work for. These restrictions need to be concise and specific, so you’re unlikely to have to follow one that isn’t written down.

Check whether the restriction is reasonable

No matter what your contract says, your old employer can’t stop you from taking a new job unless they could lose money. For example if you could:

Take clients to your new employer when you leave

set up a competing business in the same area

If a restriction would prevent you from getting a job that doesn’t affect your old employer, it may not be appropriate. A restriction can also be unreasonable if:

longer than 6 months – unless longer is customary for your job title or industry

applies to places where your old employer does not do business – e.g. B. when an entire region is mentioned, but all of their customers are from one city

applies to jobs that don’t compete with your old employer—for example, when it says you can’t take a job in sales, even selling various products

means you would not find any work at all

Negotiations with your old employer

You may be able to persuade your old employer to ignore or at least shorten a restriction. To get you to follow him they would have to go to court to prove the restriction is reasonable. This is time consuming and can get expensive, so they may prefer to compromise.

Start by explaining why you think the restriction shouldn’t apply. Explain why your new job won’t hurt their business. You may have misunderstood what your new job is or where you work.

Make it clear that you will respect any other restrictions in your contract, such as: B. Confidentiality or not approaching former customers. This can help show that you will not harm your old employer’s business.

If you’re not sure why your employer wants you to comply with the restriction, ask what business interests they are trying to protect. You may then find ways to work around this problem. For example, if they fear you’re taking their customers away, you can reassure them that you won’t.

If you had more than 1 job with your employer Whether a restriction is appropriate depends on your job title and responsibilities at the time you signed the contract – even if your job has changed since then. For example, if you have been promoted, your employer cannot argue that the restriction is appropriate because of your new, more senior position. The restriction must be reasonable based on your original role when entering into the contract. If you were in a subordinate position at the time you agreed to the restriction, tell your employer. You may not have had much customer contact or access to business information at the time, so the restriction may not have been appropriate.

If your contract also includes restrictions on dealing with former customers Restrictions on dealing with former customers should only apply to customers with whom you have dealt personally. You can still deal with clients you didn’t meet in your old job. Your contract may state that you cannot approach former customers directly, but that you can work if a former customer approaches you. This is known as a “non-solicitation clause”. Or your contract says you can’t do business with former clients at all – even if they approach you. This is referred to as a non-dealing covenant. Ask your old employer if they will let you ignore the restriction on who you can work for. Reassure them that the restrictions on dealing with former customers will be enough to protect their business. It might also be inappropriate to limit who you can work for.

Negotiations with your new employer

If your old employer doesn’t compromise, you can also ask your new employer if they can give you another job until the restriction you agreed to expires. This can either be a different type of job or a different location – that way you don’t violate the restriction.

For example, if you work in sales, you can ask your new employer to give you an administrative job for 3 months. If you agree to a temporary change, verify that your payment and terms remain the same.

Or if your old employer worked in a certain city, ask if your new employer will let you work elsewhere until your restriction expires. That way, your old employer doesn’t have to worry about you taking over their clients.

If your new employer doesn’t have any other work you could do and you really want the job, ask if you can delay starting until your restriction is up.

If you do not follow any restriction

If your employer wants you to follow the restriction but you ignore it, the only way they can prevent you from taking a new job is to take you to court. That might sound worrying, but it’s time-consuming and can get expensive, so they might not do it — especially if the constraint is too broad.

Mister,

As I am a panel counsel for several companies of this type, this is a common practice that companies employ to protect their intellectual property and other rights to provide protection in the competitive world.

When you enter into a contract with a company, you are bound by certain terms, including those granted to you.

The question, however, is what type of company you have worked for and what type of company you have joined.

as if they were direct competitors, then previous employers would be reluctant to share their systems information and other procedural working methods. Any use of their research data or IP data would amount to IP theft. I would suggest you share a little more information so we can help you better.

Otherwise my advice is not to use your data in any form and not to share your information with your new employers.

To share more information, allow us to contact you via EMAIL.

Employment at will – dismissing an employee for an interview at another company

Employment at will means that you can be terminated without notice without giving a reason. This would include a situation where your employer believes you are interviewing other companies or exploring the job market in some way. However, many employers will not fire you if you look for another job because a terminated employee may be entitled to certain benefits, while an employee who resigns voluntarily sacrifices those benefits.

There is a mostly unspoken feeling in the job industry that employees will move from job to job for better opportunities. Most companies will not contact a current employer without permission, and most current employers will not use a job search as a reason for terminating an employee. But even if you’re unlikely to get fired for looking for a new job, the best way to avoid a problem is to keep your job search discreet and confidential until you’re ready to quit.

Conducting a confidential job search during employment

The best way to conduct a confidential job search is not to discuss it with colleagues and not to use your company’s time or resources, including copiers, printers or computers, in the job search. Use your personal account or create a temporary account to interact with potential employers via email and provide your cell phone or home phone number as the contact number for potential employers. Also, avoid taking calls or interviewing while working at your current job.

Potential employers generally understand the nature of a confidential job search and will not contact your current employer unless given permission to do so. Still, it’s a good idea to let everyone know that your current employer doesn’t know about your job search and ask them to respect your privacy. This is especially important if you work in an industry with an active professional network or in a smaller community.

Scheduling job interviews

Follow your current employer’s policy on paid time off. In many cases, it’s better to use vacation or personal time for interviews and save sick leave for when you’re really sick. Some employers are strict about sick leave and will discipline employees if they abuse it. It may also be possible to schedule an interview before or after normal working hours or during a break in your day.

If you schedule an interview during the workday and it is conducted via phone or video conference, make sure you are away from your desk and are not using company resources to conduct the interview. Also, be careful what you reveal during an interview with a potential employer, especially if you’re interviewing in the same industry.

It is common practice to tell a prospective employer that you are under contract and cannot discuss matters prohibited by the terms of the contract. Otherwise, you could be at risk of termination for breaching the terms of any confidentiality or non-compete agreement. To learn more about non-compete and non-disclosure agreements, read this information from UpCounsel.com.

During your job search, make sure you continue to perform as expected in your current job. Although you intend to move on, it is important to meet the expectations of your current employer and continue to fulfill your job responsibilities even after you have informed your current employer of your intention to leave the company. This is not only professional, but important to protect your ability to receive a positive reference in the future.

If you have questions about conducting an in-work job search or believe you were wrongfully terminated, we can help. Contact Borrelli & Associates, P.L.L.C. to arrange a free consultation.

Beginning January 1, 2022, Illinois employers will be more limited in their ability to bind employees to non-compete and non-solicitation agreements. These changes result from a recent amendment to the Illinois Freedom to Work Act, Illinois Senate Bill 672 (the Amendment). The amendment codified several restrictions around restrictive agreements, including non-compete and non-solicitation clauses, that previously were only dealt with by court decisions. The amendment has also imposed new hurdles related to non-compete and non-advertising. These changes, detailed below, apply to non-compete and non-solicitation agreements that close on or after January 1, 2022.

Minimum salary requirements for non-compete and advertising bans

Previously, Illinois law prohibited employers from entering into non-compete agreements with employees earning $13 an hour or less. As amended, the Freedom to Work Act prohibits non-compete obligations for employees who earn $75,000 a year or less. The amendment also prohibits customer and employee poaching agreements for employees earning $45,000 per year or less. The salary threshold will be increased to account for inflation through 2037. For non-competition, the thresholds will be increased as follows: $80,000 by January 1, 2027; $85,000 through January 1, 2032; and $90,000 by January 1, 2037. For non-prompts, the threshold increases as follows: $47,500 in 2027; $50,000 in 2032; and $52,500 in 2037.

Generally prohibited non-competition in the construction industry and with unionized workers

With few exceptions, the amendment to the Freedom of Labor Act prohibits non-competition clauses for workers in the construction industry in general. However, non-competition clauses may apply to those workers in construction whose primary duties involve management, engineering, architectural design or sales. Those who are shareholders, partners or owners of a company in the construction industry may also be required to sign non-compete agreements.

The amendment also prohibits non-competition clauses for individuals covered by a collective bargaining agreement under the Illinois Public Labor Relations Act or the Illinois Educational Labor Relations Act.

Employees must be directed to contact legal counsel and given 14 days to sign

The amendment requires employees who are asked to sign a non-compete or solicitation non-compete agreement to be given at least 14 calendar days to review the agreement. Employers must also instruct employees in writing to consult legal counsel before signing the agreement. Failure to comply with these Terms will render the Agreement unlawful and void.

Reasonable consideration must support non-competition and non-advertising

For a non-compete or non-solicitation clause to be enforceable, it must be supported by valid consideration. In general, a consideration is something of value offered to an employee in exchange for signing an agreement. What constitutes reasonable consideration has been the subject of much discussion in recent years. The Labor Freedom Act Amendment defines “reasonable consideration” as follows: (1) two years of employment after the employee signs the non-compete or non-solicitation clause; or (2) other “consideration reasonably necessary to support an agreement not to participate in competitions or not to advertise, which consideration may consist of a period of employment plus additional professional or financial benefits, or professional or financial benefits only, which are appropriate on their own.”

While “professional or financial benefits” are not defined in the new law, experience dictates that such benefits typically include a salary increase, bonus, stock award, promotion, special training and educational benefits.

Employers must have legitimate business interests that must be protected

The amendment also codifies the requirement that a restrictive agreement must be supported by a legitimate business interest. As before, such interests typically include protecting an employer’s trade secrets or customer relationships. The amendment provides that when determining whether a legitimate business interest exists, “all of the facts and circumstances of the individual case should be considered” and “each situation should be assessed on its own particular facts”. Relevant factors include the employee’s exposure to the customer relationships of the employer or other employees; the almost permanent customer relationship; Acquisition, use or knowledge of confidential information by the employee; and the time, place and extent of the restrictions.

Additional Mandatory Enforcement Requirements

The amendment, which codifies legal requirements previously laid down in court decisions, provides that non-competition and non-solicitation agreements are unlawful and void unless: (1) the employee receives reasonable consideration; (2) the agreement is accessory to a valid agreement of employment, (3) the agreement is no larger than necessary to protect a legitimate business interest of the employer (see below), (4) the agreement does not create undue hardship for the employee, and (5) the agreement is of public interest not harmful.

Authorized Blue Penciling

While the Illinois Freedom to Work Act, as amended, cautions against completely rewriting non-compete clauses, it states that courts are free to reform or vacate non-compete and non-solicitation clauses rather than declaring them unenforceable as a whole. Relevant factors in determining whether judicial reformation is appropriate include the fairness of the limitations as originally written, whether the original limitation reflected a bona fide effort to protect a legitimate business interest of the employer, the extent of such reformation, and whether the parties included are a reform authorization clause in the agreement. For this reason, it will continue to be important to include a blue pencil clause in any restrictive covenant agreement.

Restrictions related to COVID-19

The change also limits employers’ ability to enter into restrictive agreements with employees who have been terminated, laid off or furloughed due to the COVID-19 pandemic or similar circumstances. It provides that restrictive agreements with such employees are prohibited unless the enforcement includes compensation equal to the employee’s base salary upon termination for the period of enforcement, less compensation earned by the employee through subsequent employment.

Certain agreements are exempt

The amendment to the Employment Freedom Act makes it clear that it does not apply to the following types of agreements:

Confidentiality Agreements.

Agreements Prohibiting the Use or Disclosure of Trade Secrets.

Invention Transfer Agreements.

Garden leave clauses (arrangements under which an employee who leaves a job – after being given notice or otherwise having had their employment terminated – is ordered to stay away from work during the notice period while remaining on the payroll).

Restrictive agreements entered into as part of an acquisition or sale of a business, including the acquisition or sale of an ownership interest in a business.

Agreements in which an employee undertakes not to reapply to the same employer after termination.

Attorneys’ Fees and Enforcement Opportunities

In addition to the remedies available under the restrictive covenant agreements themselves, the amendment provides that an employee may recover reasonable attorneys’ fees if the employee prevails in a lawsuit brought by an employer seeking to to enforce a non-compete or non-solicitation agreement.

The amendments allow the Illinois Attorney General’s office to file litigation or intervene when “there is reasonable cause to believe that any person or entity is engaged in a pattern and practice prohibited by law.” The Attorney General also has the power to investigate possible violations and seek a civil sanction in a lawsuit.

Revise non-compete and solicitation prohibitions with an attorney to ensure compliance

Because of the many significant changes mandated by the Labor Freedom Amendment Act, businesses should work with legal counsel to bring their non-compete and non-solicitation laws into line with this new law. Otherwise, many agreements could become legally void.

*This update was published on Westlaw Today on March 14, 2022.

© 2022 Perkins Coie LLP

The Washington Non-Competition Agreement Act governs when a non-compete agreement may be considered valid or enforceable under state law.

break even

One aspect of the Washington non-compete restrictions relates to revenue. Only employees or self-employed contractors earning more than the statutory thresholds can be bound by non-compete obligations. If an employee or independent contractor earns less than the statutory income limit, the non-compete agreements are void and unenforceable under RCW 49.62. These thresholds are set out in RCW 49.62.020 (for employees) and RCW 49.62.030 (for independent contractors).

According to RCW 49.62.040, the Ministry of Labor and Industry has to adjust these inflation thresholds every year. The adjustments for 2021 are listed below.

Legislative Dollar Adjustments Unadjusted (2020) 2021 Thresholds 2022 Thresholds Calculated Thresholds RCW 49.62.020 $100,000.00 $101,390.00 $107,301.04 RCW 49.62.030 $250,000.00 $253,475.00 $2.68

Other elements of the Non-Competition Act

In addition to the income limits set by law, the law also sets other restrictions on non-compete clauses in Washington. These other restrictions include:

A provision in a non-compete agreement signed by a Washington-based employee or independent contractor is void and unenforceable if the agreement requires the employee to make decisions about the agreement outside of Washington and if the agreement denies the protections required by law for employees . See RCW 49.62.050.

Franchisors may not prevent franchisees from hiring employees of the franchisor or other franchisees from the same franchisor. See RCW 49.62.060.

Employers are generally not allowed to ban outside employment for workers earning less than twice the state minimum wage; this limitation is subject to some limitations. See RCW 49.62.070.

violations of the law

Under Washington’s non-compete law, prosecutors can seek appeals for violations of the law. Injured persons can also take legal action themselves.

To file a complaint or if you have questions about this law, contact the DA’s office or call 206-587-5510. L&I has no enforcement powers under this law.

It’s time for you to start a new chapter in your career. As you prepare to leave your company, you may be required to sign a non-compete agreement to complete the end of your term of employment. Or you may have signed one when you first started at the company. You may be wondering what a non-compete clause is, but worry not, the Pearson Butler team is here to assist you with all of your employment needs.

What is a non-competition clause?

A non-competition clause is a written agreement between an employee and an employer that prohibits the employee from working at a similar or competing company after leaving the company. If your employer asks you to sign a non-compete agreement before you leave, chances are it won’t be enforceable.

Are non-compete clauses enforceable in Utah?

In Utah, an employer can enforce a non-compete obligation as long as it is within one year from the date the employee ceases to be employed. However, this only applies to non-competition clauses drawn up after May 10, 2016. If the employer can show the following elements, a court is likely to enforce the agreement:

There was no “bad faith” in negotiations,

The agreement was “supported by consideration”

The agreement was “necessary to protect company value”

It was “reasonable in its temporal and spatial limitations”.

A non-competition clause can be enforced if it was part of a termination agreement agreed between the employer and employee at the time of termination and meets the elements above.

If a former employee violates a non-compete obligation, the employer may seek a court to issue orders ordering them to stop violating the order. You can also force the ex-employee to pay non-competition damages if their new position is detrimental to business operations.

It is important to note that if the court finds that the non-competition clause is unreasonable or fails to meet the above elements, it is unlikely to be enforced. If you have questions or concerns about your non-compete agreement, we encourage you to speak with an employment attorney.

Employment Lawyers in South Jordan

We’ve said this before and we’ll say it again – every case is different. However, if you feel your employer is being unfair about your non-competition clause, you should make your voice heard. When you’re ready, give our attorneys at Pearson Butler a call. We’ll walk you through your agreement and find out what potential options are available to you.

You can contact our office through our website or by phone at (800) 265-2314 to begin your free consultation.