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Employee Agreement Non-Solicitation / Non-Compete

 
 
sgksam
 
Reply Sun 20 Jan, 2008 10:38 am
Following is the clause in my employment agreement:
Non-Solicitation/Non-Compete: During the term of this agreement and for a period of 2 years subsequent to the termination of this agreement,
employee shall not, without the prior consent of Company X, directly, indirectly, or through any other party solicit business from or perform services for any direct or indirect Company X customer or any other prospective Company X customer whom employee had any contact with or exposure to at any time during the term of this agreement."

I'm an employee of Michigan based Company X as full time employee for past 11 years. My company has two clients Y at NJ & Z at Philadelphia. I was working at Y around 3 years ago. Now, I am working at client Z for past 3 years. I'm still employee of X.
Now client Y is offering me a full time job. Can I join employee Y ? Is this a breach of agreement?
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Type: Discussion • Score: 1 • Views: 1,239 • Replies: 8
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TTH
 
  1  
Reply Sun 20 Jan, 2008 10:55 am
You can join with whoever you want. If you are still employed by company
"X" and "Y" is a customer of "X", then if you join "Y", yes you are in breach of that contract.
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sgksam
 
  1  
Reply Sun 20 Jan, 2008 11:25 am
Employee Agreement Non-Solicitation / Non-Compete
Not sure, if you answered my question.

You are saying you can join Y, but at the same time your are saying I am in breach of the agreement.

My question was can I join 'Y' without a breach of agreement?
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TTH
 
  1  
Reply Sun 20 Jan, 2008 11:40 am
Re: Employee Agreement Non-Solicitation / Non-Compete
sgksam wrote:
My question was can I join 'Y' without a breach of agreement?
You signed the contract with "X" so, if you join "Y", you are in breach of the contract. Unless you get "X's" prior approval (in writing would be best) agreeing to let you out of that clause.
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Noddy24
 
  1  
Reply Sun 20 Jan, 2008 11:42 am
Quote:
employee shall not, without the prior consent of Company X, directly, indirectly, or through any other party solicit business from or perform services for any direct or indirect Company X customer or any other prospective Company X customer whom employee had any contact with or exposure to at any time during the term of this agreement."


Company X has not given consent. Company Y offered you a contract based on what they know of your background with Company X.

If you accept this job without the prior consent of Company X you would be breaking your agreement with them.
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parados
 
  1  
Reply Sun 20 Jan, 2008 11:49 am
"solicit business or perform services for" is the key phrase.

That would only make it a question of whether you "performing services" if you are an employee at that company.

I can't answer that question legally but from an ethical standpoint any company that wants to prevent it's employees from working somewhere else would find it difficult defending such a thing. Who would want to work for a company that says you can't go use your skills elsewhere without being sued?

I reread and note that it is entitled "Non-Solicitation/Non-Compete". They might have a hard time making a case that you are competing with their company if you work for one of their customers. It might depend on what your company does and what you would do at the new job.

This could just be standard boilerplate legalize that they don't care about until you are actively trying to take a customer away from them. I guess the question is, if you join Y will they stop needing the services of your present company? If so, then they may try to enforce the clause. If not, then they may not care.
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Debra Law
 
  1  
Reply Tue 22 Jan, 2008 04:15 am
Check out:

http://tcattorney.typepad.com/noncompete/
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dadpad
 
  1  
Reply Tue 22 Jan, 2008 06:25 am
Show client Y your contract and ask them to make a judgment.
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joefromchicago
 
  1  
Reply Tue 22 Jan, 2008 09:51 am
Non-compete clauses are contrary to the freedom of contract, and thus are held to a high degree of scrutiny by the courts. In my experience, courts seldom enforce them, even if they are drafted by the biggest corporations with the smartest lawyers. A non-compete clause not only has to be reasonable in terms of time and location, it must serve to protect a tangible interest that would be severely damaged in the event that the former employee goes into competition with the former employer. As such, non-compete clauses are typically enforceable only against former employees who can take away a lot of business or who know trade secrets. Against the average employee, however, such clauses are usually unenforceable.

We've covered this before.
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