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Brother hit with Non-Compete form... UPDATE: Unemployment Blocked (1 Viewer)

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Insoxicated
Won't bore with too many details... but here's the gist:

• Decade-long employee in excellent standing in FLORIDA (edit to add). Biz recently taken over by son of former boss. New Boss aka Son is somewhat inept. 
• New boss just dropped Non-Compete on all employees requiring signing or being fired. 
• Stipulates abstaining from very general field of work description for 2 years and within 75miles. (they are a design/print/shirt shop... clause blocks any "design" work) 
• Clause covers both employees leaving of their own accord, as well as if they are terminated. The latter seems odd... possibly illegal? 
• His course of employment generally doesnt involve trade secrets or overly specialized training received on the job. Only recourse would be through the protection of customer relationships, I'm guessing? 

A cursory search of FL employment law indicateds the 2yr / 75mi window as being on the upper end of reasonable scope of protection for the employer. I'm curious about other factors (blocking an employee who's been terminated by the employer, scope of business, etc) 

Any of our FBG legal eagles willing to provide a bit of general guidance? While Im aware he should consult an attorney, and any advice provided can't be considered legal advice (etc).... some general guidance would be greatly appreciated. 

Thus far he's declined to sign and is continuing about his work. New boss is pissed. 

 

 
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I'm not a lawyer but I was sued by a former company for violating my non-compete. I learned that it depends on the state. In Texas, for example, the non-compete must have a specific timeframe and radius to be enforceable. It seems that your brother's non-compete has both of those but perhaps his state has different requirements.

Consult a lawyer.

 
I am not a lawyer but I would imagine entering into a non-compete through a willful signing of a contract (like, you apply for a job, they extend an offer that includes a non-compete) would be viewed entirely different than being told "sign this or you're fired". 

 
I am not a lawyer but I would imagine entering into a non-compete through a willful signing of a contract (like, you apply for a job, they extend an offer that includes a non-compete) would be viewed entirely different than being told "sign this or you're fired". 
What's the difference if Florida is an at-will state?

As someone else said, non-competes are state specific.

 
I'm no lawyer, but I've heard they are very difficult to enforce.  However, that is likely dependent upon the state and the line of work in question.  One thing I do know is that it is unenforceable to try and limit a former employee's right to earn a living.  

Steal clients?  Absolutely should be illegal.  But to say a professional can't operate a normal business within the radius of their previous employer is likely not valid.  I'd sign it and then let the chips fall where they may.  I'm pretty sure a decent lawyer could destroy any kind of non-complete cause that wouldn't let a designer perform design services to the general public in their town of residence.

 
Seek actual legal advice from someone paid to represent YOU.
This is in the cards.... but I've found the FFA to be an excellent source of basic info on stuff like this.... and several times negated the need to seek representation. 

At this point it's clear his long term status with this company is limited at best.... the questions are the enforceability/conditions of the stipulations, and if he should sign then leave or refuse to sign and risk immediate termination. He's done nothing wrong in the past so I'm imagining he could collect unemployment insurance from any termination.

He's made it clear in email communications he's currently not willing to sign due to overly restrictive nature, but he's not leaving the company and is continuing to work there. This seems to be the best course of action while assessing options, but I don't know. 

He has two young kids and a wife at home. 

 

 
What's the difference if Florida is an at-will state?

As someone else said, non-competes are state specific.
Consideration. Obviously there could be other consideration in the non-compete. But pretty sure in Texas, for example, just keeping your job isn't sufficient consideration because Texas is an at will state. And, like everyone said, depends on FLA law.

BUT, Big Bottom is the expert. So he will probably tell me I'm wrong.

 
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Isn't this @bigbottom's field of expertise?  I think he's a labor lawyer.  One of the few good ones...just kidding lawyerguys, don't sue me.

 
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Good notebook... hoping @bigbottom is wiling to drop in with a few nuggets of wisdom. Thanks guys.... brother and folks are a a bit worked up over this. 
I imagine they are, this is an obnoxious tactic for the boss to do.

Best thing about all this is you look like a superhero with little to no work, thanks to the FFA!!

 
I imagine they are, this is an obnoxious tactic for the boss to do.

Best thing about all this is you look like a superhero with little to no work, thanks to the FFA!!
:lol:  wouldn't be the first time the collective knowledge of this place has helped me look significantly smarter than i actually am. 

Also reaching out to some B&M buddies in law, but figured it couldn't hurt to throw a line in the water to the good folks here as well. :thumbup:  

 
Consideration. Obviously there could be other consideration in the non-compete. But pretty sure in Texas, for example, just keeping your job isn't sufficient consideration because Texas is an at will state. And, like everyone said, depends on FLA law.

BUT, Big Bottom is the expert. So he will probably tell me I'm wrong.
This seems backwards.

 
Found this: 

http://www.myemploymentlawyer.com/questions/Compete-Agreement-after-3-years.htm

Being that Florida is an at will employment state, you could be fired for refusing to sign the agreement and would not have any recourse. You should be able to qualify for unemployment benefits if terminated for the refusal to sign the agreement.

Its important to note that in Florida when you sign a valid enforceable non-compete agreement, it does not matter if you have are just starting the job or have been working there for 10 years. 


So it LOOKS like:
• Yes it's legal to demand he sign a NCA after long term of employment
• Yes he can be fired for not signing 
• No it shouldn't hinder his ability to collect Unemployment 

What remains to be seen:
• If a NCA is enforceable over the wide scope dictated, or if it is illegal for blocking his ability to earn a living. 
• What is the best course of action for him to proceed. 
• How enforceable would it be if he signed (hard to tell without text of the agreement). 

 
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This seems backwards.
In an at will state, the company can turn around and fire you the next day - the next hour - after you sign the non-compete. So its not really consideration at all - because the company is giving nothing of value.

 
I'm not a lawyer, but this is total bull#### and a slam dunk if he decides to sue. Since he's a brother he can hit them for racial discrimination as well. 

 
In an at will state, the company can turn around and fire you the next day - the next hour - after you sign the non-compete. So its not really consideration at all - because the company is giving nothing of value.
Of course they are, they are agreeing not to fire you if you sign the non-compete.

 
he should have someone else sign his name and record that happening. Turn in the non-compete and if it ever becomes an issue down the road break it the video of someone else signing the document and case dismissed.  

 
Of course they are, they are agreeing not to fire you if you sign the non-compete.
Its my understanding that what I wrote has been taken back a little but that's still generally the law in Texas.

Feel free to disagree with the Texas Supreme Court next time you are practicing in Texas.

 
We make people sign non-competes as a requirement for employment, but our lawyer advised us early on that they are one of the hardest contracts to enforce. Ours is very "easy," they can't solicit employees or current customers, and that's about it. But our lawyer said even that is hard to enforce.

 
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I often disagree with the Texas Supreme Court.

I haven't researched the question, but it seems to me to be a fact-based inquiry.

If your employer says, "sign this NCA or be fired" and then after you sign, says, "Ha!  You're fired, but your NCA is enforceable!", yeah I imagine a court would find that to have been sham consideration.  If, on the other hand, the employer fires you in a round of layoffs 13 months later, then the court may well come out differently. 

 
We make people sign non-competes as a requirement for employment, but our lawyer advised us early on that they are one of the hardest contracts to enforce. Ours is very "easy," they can't solicit employees or current customers, and that's about it. But even our lawyer said even that is hard to enforce.
Yep.  We do the same at our business and were told the same thing by our lawyers.  Basically they would have to leave for the exact same type of business operating in the same area and they have to either have had access to company industry secrets and are sharing them or be actively stealing customers for it to have any real chance of being enforced.

 
I can only comment on personal experience. 

Sounds like I am roughly in the same field as your brother, although I'm in NY. I've signed non-competes at almost every gig I've been at (4 or so) and I've never had one enforced on me. Most f the time i've left for better opportunities doing the same type of job. However, I've never attempted to take any clients with me. I got a letter 1x from a lawyer "reminding" me that I had a NC, but there was no indication of legal action unless I didi something to harm the old company. 

I have seen NC enacted on other friends, 1 was in Calf b/c he went out on his own and took a client with him. After a short legal bout, they negotiated a small settlement and my friend went about his day. 

The other was more messy and took years but it was a very big pissing match between the Company and a very high level former employee who is also the daughter of the former Co President (he didn't sue her, the new administration did, like I said...big pissing match).

In the end, what I have been advised by a lawyer is that the company cannot stop your brother from making a living. There is only so many reasonable career opportunities in his area and they cannot control his future ability to feed his family. Providing there is no harm or inside secrets used against the old company, then there is no grounds for enforcement.

Likewise, if there was informants, they can only sue for what the length of the NC is valid. So say I decided to leave and go on my own and take a client with me. The client is worth $25k per year to my former company. The most amount of damage the former company could go after me for is $50—the value to the old company for the 2 years that my NC was valid. Logic is that a client is free to work with whom they want, and after the contract was up, they could legally leave the agency and go work with the artist. 

again, this is what I know, however seeking local legal advice is advised. Maybe a bunch the employees consult together with a lawyer. Sounds like the son is a 1st class jagfoff who shouldn't be running a company. 

GL

 
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I'm not an expert, but have been on the employer and employee side of this. There are some states where continued employment alone is sufficient consideration for a non-compete to be enforceable, but many where that is not the case (where you have to actually give a promotion, raise, stock grant, etc. in connection with the execution of a new non-compete.) As one would imagine, its important to actually state that recalcitrant employees will be terminated in the cover letter you send with the document. Its possible this type of action is not really aimed at him or his role, but he's included in a company effort that is really aimed at a different class of employees or perhaps even one or a few particular people.

In my experience, the important thing with these is not so much the legal technicalities, but the relative leverage of employee and employer. There are certain industries where these are routinely litigated (financial advisory being one of the most common), but in most cases these are a matter of negotiation. To steal a cliche, if you find yourself in court over a non-compete, you've already lost. The important questions are - how important is he to his company? Is his role fungible or does he have skills, knowledge, experience that is hard to replace? How easily can he get another job and how important is this job to him? If he's got "hand" at the company, he should speak with a lawyer and negotiate reasonable revisions or carve-outs. I've actually seen cases where a non-compete was signed, and the CEO sent an email to the employee saying "we won't enforce it against you."  That was fun. If he's dogmeat at the company, its really just a question of whether he wants to continue to work there and take his chances. In many or most cases, if he's not that important and can't really hurt them, they won't care where he goes when he's fired.

 
You know that the best advice is to have him consult with an employment attorney in his jurisdiction. 

 
I'm not an expert, but have been on the employer and employee side of this. There are some states where continued employment alone is sufficient consideration for a non-compete to be enforceable, but many where that is not the case (where you have to actually give a promotion, raise, stock grant, etc. in connection with the execution of a new non-compete.) As one would imagine, its important to actually state that recalcitrant employees will be terminated in the cover letter you send with the document. Its possible this type of action is not really aimed at him or his role, but he's included in a company effort that is really aimed at a different class of employees or perhaps even one or a few particular people.

In my experience, the important thing with these is not so much the legal technicalities, but the relative leverage of employee and employer. There are certain industries where these are routinely litigated (financial advisory being one of the most common), but in most cases these are a matter of negotiation. To steal a cliche, if you find yourself in court over a non-compete, you've already lost. The important questions are - how important is he to his company? Is his role fungible or does he have skills, knowledge, experience that is hard to replace? How easily can he get another job and how important is this job to him? If he's got "hand" at the company, he should speak with a lawyer and negotiate reasonable revisions or carve-outs. I've actually seen cases where a non-compete was signed, and the CEO sent an email to the employee saying "we won't enforce it against you."  That was fun. If he's dogmeat at the company, its really just a question of whether he wants to continue to work there and take his chances. In many or most cases, if he's not that important and can't really hurt them, they won't care where he goes when he's fired.
Really nice post.  I wouldn't be surprised if biggie could add substantively to this.  For the most part, though, this is the best take you're going to get in this setting.  

 
You know that the best advice is to have him consult with an employment attorney in his jurisdiction. 
Sure, but he was pretty up front that he didn't come here for the best advice. I'm assuming he knew that you'd be weighing in.

 
You know that the best advice is to have him consult with an employment attorney in his jurisdiction. 
I would actually think it better to consult with an attorney after reading the thoughts and viewpoints of attorneys, employers and employees that have been exposed to similar situations, knowing to take everything with a grain of salt and that most have operated under varying statutes.

I think that would arm him with better ammunition to vet a potential attorney if he doesn't have trusted recommendations in this precise area, and allow him to better and more comfortably explain all the details of his situation and industry that may not be explicitly set forth in the contract.

 
Of course they are, they are agreeing not to fire you if you sign the non-compete.
Only certain kinds of consideration can support a non-compete in Texas (the initial post to which this exchange responded). Continued employment is not one of them. 

 
I often disagree with the Texas Supreme Court.

I haven't researched the question, but it seems to me to be a fact-based inquiry.

If your employer says, "sign this NCA or be fired" and then after you sign, says, "Ha!  You're fired, but your NCA is enforceable!", yeah I imagine a court would find that to have been sham consideration.  If, on the other hand, the employer fires you in a round of layoffs 13 months later, then the court may well come out differently. 
The types of consideration recognized in Texas to support a non-compete are specialized training, the provision of confidential or trade secret information, or an equity or ownership position in the company. Because past consideration is not consideration, the NCA would be unenforceable in the circumstance you describe (he had not been given new confidential information or training after signing the agreement).  (Equity situations aside), the nature of the confidential information or specialized training supporting the NCA will be evaluated in determining whether and to what extent the NCA agreement will be enforced. 

 
Found this: 

http://www.myemploymentlawyer.com/questions/Compete-Agreement-after-3-years.htm

Being that Florida is an at will employment state, you could be fired for refusing to sign the agreement and would not have any recourse. You should be able to qualify for unemployment benefits if terminated for the refusal to sign the agreement.

Its important to note that in Florida when you sign a valid enforceable non-compete agreement, it does not matter if you have are just starting the job or have been working there for 10 years. 


So it LOOKS like:
• Yes it's legal to demand he sign a NCA after long term of employment
• Yes he can be fired for not signing 
• No it shouldn't hinder his ability to collect Unemployment 

What remains to be seen:
• If a NCA is enforceable over the wide scope dictated, or if it is illegal for blocking his ability to earn a living. 
• What is the best course of action for him to proceed. 
• How enforceable would it be if he signed (hard to tell without text of the agreement). 
I don't practice in Florida, but based on my rudimentary knowledge of Florida non-compete law, I think the above is as good of a description that I've seen in this thread. 

 
Thanks @bigbottom

update: 

apparently deadline was today 

when prompted if he will have Job tomorrow, his boss said he would get an email tonight. 

For fear of not being able to get into the office tomorrow, he packed up his personal belongings, made sure The bosses wife went through the box so he wouldn't be accused of stealing anything, and took them home.

if he does not receive an email today, he plans to go into work like normal tomorrow. 

I am strongly advising him to talk to an employment lawyer  to go over the contract, then likely sign it knowing full well it will be of limited enforceability. 

 Reportedly one person has already left and is being sued… But apparently that person stole a bunch of client information and was using it to contact clients… I explained that clearly being a ####### moron is going to get you sued, but that doesn't apply to him unless he's a ####### moron too. 

 
Been on both sides.  Luckily I'm in CA.  Employers don't mess with us.  That being said, guys like this drive me nuts.  First of all, if I terminate someone I'm not going to try and stop them from making a living.  If I let them go, then I shouldn't mind competing against them.  Matter of fact, I should welcome it.  Granted, they might have some info or relationships but there is typically a reason they are being let go.  Not A players, underperforming, etc.  We always just sent letters from out attorney if the employee went to a competitor reminding them of the employee agreement they signed, and they are not to contact our customers, poach our talent etc for a certain time period, and all information they had about us was to remain confidential.  We just scared 'em a bit to try to keep them playing fair.  

It really depends on the state, and the employer (have they done it before, do they have deep pockets).  I consulted an employment law attorney to fully understand my rights.  I'd rather do one consultation then end up in a lawsuit and having to pay a lot more.  But honestly most companies don't want to deal with this stuff.  They know it's expensive and hard to win.

 
I read the OP but none of the responses.  I have been through this and quit Goldman Sachs because they were trying to get me to sign a non compete.  I spend a lot of time and money figuring out this stuff.  Essentially, the most important factor is the state.  Some states enforce them and some don't.  If he's in one that doesn't enforce them, have your brother sign it and not worry about it.  If the state does enforce it, all is not lost.  If he signs it and then moves to a competitor, it's up his former employer to file an injunction with a court and the outcome almost certainly depends on the judge.  Some will enforce it and others won't deny your brother the opportunity to make a living.

HTH

 
Been on both sides.  Luckily I'm in CA.  Employers don't mess with us.  That being said, guys like this drive me nuts.  First of all, if I terminate someone I'm not going to try and stop them from making a living.  If I let them go, then I shouldn't mind competing against them.  Matter of fact, I should welcome it.  Granted, they might have some info or relationships but there is typically a reason they are being let go.  Not A players, underperforming, etc.  We always just sent letters from out attorney if the employee went to a competitor reminding them of the employee agreement they signed, and they are not to contact our customers, poach our talent etc for a certain time period, and all information they had about us was to remain confidential.  We just scared 'em a bit to try to keep them playing fair.  

It really depends on the state, and the employer (have they done it before, do they have deep pockets).  I consulted an employment law attorney to fully understand my rights.  I'd rather do one consultation then end up in a lawsuit and having to pay a lot more.  But honestly most companies don't want to deal with this stuff.  They know it's expensive and hard to win.
CA is a whole different ball of wax. Employment non-competes are unenforceable as a matter of law. 

 

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