QUESTION
Is this non compete agreement enforceable?
Asked on Apr 13th, 2014 on Labor and Employment - California
More details to this question:
I was employed by company A. I was assigned to work for our client company B. At the time I was employed, I also signed a non compete agreement, which states that "I shall not directly or indirectly engage in any business activity that is or may be competitive with company A in any state where company A conducts its business, unless I can prove that any action taken in contravention of this agreement was done without the use in any way of confidential information." This January, Company B decided to turn my contractual position into a full time one (in other words, instead of outsourcing the job to another company like A, B wants to have the jobs done internally and permanently). B then created a job position and posted it publicly. I applied and got the offer. When I informed A after accepting the offer, I was fired me on the spot. Then, I started working for B. Now my ex-boss threatened to sue me for breaching the non compete agreement. My concern is, B changed this from contractual to full time, and thus A will not get this position in the future, regardless of who gets the job. Can this still be regarded as competition? Secondly, I am not a core member of company A, thus I do not have any confidential information (trade secret/bid strategy/client list) from A. Moreover, because the goal of the two companies are different, any inside information in A that I limited know would not interest or benefit B at all. Is this NCA enforceable?
5 ANSWERS
I do not answer questions about non-compete agreements unless I read the entire document. I am unable to answer your question.
Answered on Apr 16th, 2014 at 6:37 PM
Any lawsuit would likely be against both you and Company B. So does Company B know about your non-compete with Company A? Ideally, you would have informed Company B about your non-compete with Company A before you applied for an accepted the job with Company B.
Answered on Apr 16th, 2014 at 6:37 PM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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I cannot tell without a review of all the documentation. Non-competition agreements are certainly legal in Michigan, and one of the reasons for them is to keep companies which had previously been contracting outside company's employees from converting those jobs to full-time, inside positions, and stripping the contracting company of its employees by hiring them. Obviously, assuming that the contracting company was making money with the placement, that is competitive and detrimental to the contract employee's previous company. On the other hand, I would be surprised that company B was not constrained, and in fact prohibited, from hiring previous contract employees for at least a period of time or without providing some form of consideration to company A. That is normally how contract employee providing the company protects itself.
Answered on Apr 16th, 2014 at 6:37 PM
Employment Law Attorney serving Dana Point, CA
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Mains Law Office
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You should look up Cal. Business and Professions Code 16600. It sounds as if your non compete is void and unenforceable in California since you are not a business owner and not privy to confidential trade secrets of the company. Your former employer's threat are not legally enforceable in California based on the information you have provided.
Answered on Apr 16th, 2014 at 6:37 PM
Commercial Contracts Attorney serving Boise, ID
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Peters Law, PLLC
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The real problem here is that A should have had an agreement with B that if B hires A's people, B would pay 6 months of your salary to A. That is what I put in my agreements and it is only fair. A's argument is really with B. But if they want to sue you, I suppose you give the complaint to B and see what it says.
Answered on Apr 16th, 2014 at 6:37 PM