Help me understand my rights (non compete)
Help me understand my rights (non compete)
(OP)
I'm sorry this has to be my first post but Google brought me here when I was looking for info, so here we go..
I started with a company in 1997 as a technician and worked my up and eventually went back to school and finally got into the engineering department while continuing school. In 2009 we were acquired by a large corporation but nothing really changed. In 2011 my part of the business was sold off and the new owners required everyone to sign an "employee agreement" or be fired. This agreement contained some non-compete and confidentiality stuff. I had no real professional experience outside this job and had not even finished my degree yet, and being a one income family with kids I signed it out of fear of unemployment. The new owners proceeded to run the company into the ground (still running unfortunately). So I left in May of this year for another job while I finished my degree. Well I'm finally graduating in two weeks and have an incredible opportunity with a company that will be a direct competitor with the company I signed the agreement with.
My main question is does signing this agreement two years ago cover everything for the 14 years prior to them owning the company? The two years I spent with them was doing sustaining work almost exclusively. And I did not have any contact with customers or anything like that. The job offer I have is available to me because of the vast experience I have in the industry even though I am a new engineer and I'm afraid I severely hampered my career path, I don't know much outside this industry and that makes the jobs I can get seriously less desirable than within the industry.
I plan on talking to a lawyer but it takes forever to get in to see one and they are expensive. I am hoping for some insight from some experienced professionals here. I'm in PA by the way. Also the agreement I signed says its governed by Arizona law because that's where the purchasing company is from. I'm really sick to my stomach over all this, I feel like I've messed up my chance and I'm afraid my family will suffer for it. Thoughts???
Thanks!
I started with a company in 1997 as a technician and worked my up and eventually went back to school and finally got into the engineering department while continuing school. In 2009 we were acquired by a large corporation but nothing really changed. In 2011 my part of the business was sold off and the new owners required everyone to sign an "employee agreement" or be fired. This agreement contained some non-compete and confidentiality stuff. I had no real professional experience outside this job and had not even finished my degree yet, and being a one income family with kids I signed it out of fear of unemployment. The new owners proceeded to run the company into the ground (still running unfortunately). So I left in May of this year for another job while I finished my degree. Well I'm finally graduating in two weeks and have an incredible opportunity with a company that will be a direct competitor with the company I signed the agreement with.
My main question is does signing this agreement two years ago cover everything for the 14 years prior to them owning the company? The two years I spent with them was doing sustaining work almost exclusively. And I did not have any contact with customers or anything like that. The job offer I have is available to me because of the vast experience I have in the industry even though I am a new engineer and I'm afraid I severely hampered my career path, I don't know much outside this industry and that makes the jobs I can get seriously less desirable than within the industry.
I plan on talking to a lawyer but it takes forever to get in to see one and they are expensive. I am hoping for some insight from some experienced professionals here. I'm in PA by the way. Also the agreement I signed says its governed by Arizona law because that's where the purchasing company is from. I'm really sick to my stomach over all this, I feel like I've messed up my chance and I'm afraid my family will suffer for it. Thoughts???
Thanks!





RE: Help me understand my rights (non compete)
xnuke
"Live and act within the limit of your knowledge and keep expanding it to the limit of your life." Ayn Rand, Atlas Shrugged.
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RE: Help me understand my rights (non compete)
RE: Help me understand my rights (non compete)
Quietly take the job.
RE: Help me understand my rights (non compete)
RE: Help me understand my rights (non compete)
The probability of getting sued is relatively remote, and depends on the tort laws in your state and in Arizona. They have a huge burden to prove anything:
> that you took IP from the original company
> that you gave the IP to your new company
> that your new company incorporated the IP
> that your new company profited from the IP
> etc.
What I would suggest that you do is to make sure that you do not use IP, etc., developed or used by our old company, unless you have publicly available information of same. This is usually not horrifically difficult; probably 80% of issued patents are highly derivative, and often, are not even patentable, because the invention or process existed prior to the submittal of the patent application.
TTFN

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RE: Help me understand my rights (non compete)
David Simpson, PE
MuleShoe Engineering
Law is the common force organized to act as an obstacle of injustice Frédéric Bastiat
RE: Help me understand my rights (non compete)
Derek
RE: Help me understand my rights (non compete)
and
"...contact with a company client for the purposes of selling or soliciting services..."
or
"...hiring of employees...who are currently employed..."
unless you are planning on starting your own business as a competitor or being involved with hiring or marketing in your new position, I don't see much to be concerned with.
RE: Help me understand my rights (non compete)
RE: Help me understand my rights (non compete)
You said "" the new owners required everyone to sign an "employee agreement" or be fired."" Can you get other employees or Ex employees to attest to that in court?
If you can Most states have laws about signing under duress. Research the laws in your state, you may find that non compete legally unenforceable.
B.E.
You are judged not by what you know, but by what you can do.
RE: Help me understand my rights (non compete)
If I decided to take the job would my next employer be at risk of paying damages or would they likely just fire me? I'm ok with taking the risk myself but I don't want to put anyone else in jeopardy of possible financial penalty, even if its a long shot I would loose I imagine court costs would be astronomical.
Thanks everyone for your advice, I can't tell you how much I appreciate it.
RE: Help me understand my rights (non compete)
Mike McCann
MMC Engineering
RE: Help me understand my rights (non compete)
Thanks!!
RE: Help me understand my rights (non compete)
RE: Help me understand my rights (non compete)
RE: Help me understand my rights (non compete)
RE: Help me understand my rights (non compete)
RE: Help me understand my rights (non compete)
As to your new employer being sued, they are not a party to your contract with your former employee. Legislatures can make laws like prohibiting the receiving of stolen property, but that concept doesn't really carry into tort law. Plaintiffs must be party to an agreement to take on any liability. For example, if you were living in a house with a mortgage when you quit your former employer and after moving to the new employer you default on the mortgage the bank does not have any recourse against your employer (either new or old) because they were not party to the mortgage contract. Same concept--if you violate a non-compete that is between you and your former employer. Anti-poaching suits happen sometimes, but they are based on a different theory than (and don't rely on) your non-compete agreement.
David Simpson, PE
MuleShoe Engineering
Law is the common force organized to act as an obstacle of injustice Frédéric Bastiat
RE: Help me understand my rights (non compete)
RE: Help me understand my rights (non compete)
You would be wise to not sign one of these agreements again. If your potential employer requires it, walk away. Nobody needs this kind of headache. Life is too short.
Maui
www.EngineeringMetallurgy.com
RE: Help me understand my rights (non compete)
RE: Help me understand my rights (non compete)
1. Is the time period reasonable? Usually up to one year is considered reasonable.
2. Is it limited in geographical area? Usually up to 50 or 100 miles from the location is considered reasonable. If companies have multiple offices, this becomes an issue.
3. Was the signing voluntary or coerced? In this case, you have a good defense...sign or be fired. Not acceptable.
4. Is the receiving firm in direct competition? You have said "yes" to this one.
RE: Help me understand my rights (non compete)
I don't think that's true. If LONR violates his employment contract and steals IP, then the receiving party is receiving stolen goods; there is no requirement to have been a party to any prior agreement, or even that they necessarily were fully aware that the IP was stolen. I think case law has been fairly consistent about this, assuming that the plaintiff can actually show, or cause to be shown, that the defendant received and made use of stolen property.
TTFN

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RE: Help me understand my rights (non compete)
David Simpson, PE
MuleShoe Engineering
Law is the common force organized to act as an obstacle of injustice Frédéric Bastiat
RE: Help me understand my rights (non compete)
TTFN

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RE: Help me understand my rights (non compete)
Some employers will go to significant lengths to enforce a non-compete agreement, even bringing action against the new employer. The action might not stick, but costs the new employer money to fight...one of the goals of the non-compete agreement holder!
RE: Help me understand my rights (non compete)
I've never had one of these kicked back. The drone collecting them usually just cares that they have a piece of paper with your signature. I had one of them verbally admonish me once, and I told them that we could discuss it if the paperwork was kicked back from higher up. It wasn't.
RE: Help me understand my rights (non compete)
I signed one of these agreements once, and I learned my lesson. I will NEVER sign one of these agreements again.
Maui
www.EngineeringMetallurgy.com
RE: Help me understand my rights (non compete)
I have worked in 7 different jobs over the past 35 years and in a few have signed non-disclosure and patent assignment agreements, but I don't any have ever asked for a non-compete agreement. Like someone pointed out, they need to be restrictive in terms of time and distance. Since all but one of my job changes has been more than 750 miles apart, a non-compete would usually fall through for me anyway.
"Wildfires are dangerous, hard to control, and economically catastrophic."
Ben Loosli
RE: Help me understand my rights (non compete)
RE: Help me understand my rights (non compete)
Would anyone take that non-compete agreement to the potential employer, who has presented you with an offer, and ask to have their lawyer review it (on their dime)? I understand any assurances would be worth less than the paper they are wrote on, but then again I don't want to work for a firm that will not protect it's employees.
RE: Help me understand my rights (non compete)
RE: Help me understand my rights (non compete)
By the way, your new employer has no obligation whatsoever to defend you against a lawsuit brought about by a non-compete agreement with a former employer. And if you ask them many will tell up front that they will NOT defend you.
Maui
www.EngineeringMetallurgy.com
RE: Help me understand my rights (non compete)
I know in AU, they are only partially enforceable, especially if it was signed under duress. Someone cannot stop you earning a living and putting food on your plate. However the issue is this costs money to fight in court.
When it comes to IP, it is only physical drawings or software of programs.
Your brain is not there IP.
"Structural Engineering is the Art of moulding materials we do not wholly understand into shapes we cannot precisely analyse, so as to withstand forces we cannot really assess, in such a way that the community at large has no reason to suspect the extent of our ignorance." Dr. Dykes, 1976
RE: Help me understand my rights (non compete)
RE: Help me understand my rights (non compete)
RE: Help me understand my rights (non compete)
ONE year is more typical (particularly in the tech industry), and as has been mentioned before, the enforceability of even that is subject to a lot of conditions.
Dan - Owner
http://www.Hi-TecDesigns.com
RE: Help me understand my rights (non compete)
The moral of the story is consider carefully any agreement you sign with an employer/customer/client. If you don't like the terms, either don't sign it or ask for it to be revised.
RE: Help me understand my rights (non compete)