So my son just got his first job offer out of college. In reading through the material, he must sign what is called a restrictive covenment agreement. Within the agreement, there’s a non- compete clause. It’s a uk company and believe this is standard practice there and Europe. My concern is it severely restricts his leaving to a competitor in the future. How enforceable are the agreements?
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Non-compete job agreement (1 Viewer)
- Thread starter stlrams
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Dezbelief
Footballguy
Much less so in the South than the North. Is there a timeframe on the non-compete? More than a couple of years is too much IMO.
It’s 2 years but there’s some broad statements like I will not, directly or indirectly, solicit or do business with any Customer or Potential Customer of the Employer for the purposes of engaging in any business that competes or is planning to compete with the products or services created, developed, offered, marketed, distributed, or sold by the Employer, upon which I worked during the course of my employment with the Employer. For purposes of this Section 2.2(b), “Customer” shall mean any customer of the Employer who has conducted business with the Employer within the last two (2) years of my employment with the Company and (i) with whom I have had contact or (ii) about whom I obtained Confidential Information or became familiar with through Confidential Information (as defined in Paragraph 1.1), during the course of my employment with the Employer. For purposes of this Section 2.2(b), “Potential Customer” shall mean any entity whom the Employer has solicited for business or from whom, to my knowledge, the Company planned to solicit business at any time within the last two (2) years of my employment with the Company and (i) with whom I have had contact or (ii) about whom I obtained Confidential Information or became familiar with through Confidential Information (as defined in Paragraph 1.2), during the course of my employment with the Employer.
It’s an insurance job in Connecticut.
encaitar
Footballguy
Non compete clauses are very difficult to enforce. You basically would have to join a company that does exactly what the current company does and intends to drive the current company out of business to make them stick. Usually the reason for signing one is to... 1. Make sure the potential employee is serious about your company, and 2. Make sure you're not training them only for them to start their own business and steal your clientele.
bigbottom
Footballguy
In the U.S., it varies from state to state. Not enforceable in California, Oklahoma or North Dakota, for example. Enforceable (provided the restrictions with respect to scope, duration and geography are reasonably limited) in a bunch of other states, including states in the South.
As far as the job being in the UK, it is my understanding that non-competes with reasonable terms are enforceable, but UK-based employment lawyer would be in a better position to provide specific advice tailored to the situation here.
bigbottom
Footballguy
I’ve enforced non-competes in court many, many times (I’ve also gotten them significantly reduced or struck down). The bolded is simply not true as a general proposition. It is highly dependent on the jurisdiction where the matter is being litigated.
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bigbottom
Footballguy
Ah, it’s in Connecticut, not the UK. I haven’t litigated non-competes in that state, but this provision has been drafted in such a manner that would likely be viewed favorably by courts in states where such agreements are enforced. Many states view customer solicitation restrictions more favorably than blanket non-competes that prohibit any employment with a competitor.
-fish-
Footballguy
bigbottom
Footballguy
Whether a state is a right to work state refers to union membership rules, not non-compete enforceability.
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bigbottom
Footballguy
Not vouching for this, but this seems to be a decent 50-state survey: https://www.beckreedriden.com/50-state-noncompete-chart-2/
So this basically says that he won't solicit business from customers of his new employer. Realistically he's at the new job for 3-5 years. Even 5 years from now, he isn't going to be going to be soliciting business if he jumps ship, so I wouldn't worry about it. Not that it's not enforceable, just saying it's less relevant to where he is in his career compared to people in more senior roles.
Judge Smails
Footballguy
We’re solid in CA. Non issue
Foosball God
Foos
I would say for most 1st time college kids this is probably not going to be an issue. Unless he's taking a client list with him and directly trying to steal customers his current company isn't going to care about a low level employee.
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