Help me understand my rights (non compete) 2

[lifeofnoregrets]

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!

 

[xnuke]

No one can help you without seeing what you signed, and only a lawyer can offer legal advice. You're best bet is seeing the attorney and bringing the agreement.

xnuke
"Live and act within the limit of your knowledge and keep expanding it to the limit of your life." Ayn Rand, Atlas Shrugged.
Please see FAQ731-376 for tips on how to make the best use of Eng-Tips.

 

[greenone]

The validity of Non-competes varies by state. California has usually come down on the side of the employee; other states differ. You need to do some research for your specific area.

 

[TheTick]

Nearly all non-compete agreements are unenforceable because they constitute an unfair restraint of trade. They have to be very specific before they are worth anything.

Quietly take the job.

 

[lifeofnoregrets]

I've attached the agreement with the company's name blackened out and with a portion removed that specified specific equipment they sold prior to purchasing my company. I believe it is a generic document they used for acquisitions as there is nothing specific to my company or equipment.

 

[IRstuff]

The prior 14 years are technically owned by the new company, assuming they bought all assets and intellectual property of the original company, which is usually the case.

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
faq731-376

Need help writing a question or understanding a reply? forum1529

 

[zdas04]

Like the folks said above, different jurisdictions have different rulings on this stuff. In some states, only executive-level non-competes are ever upheld and all others are voided because they "were signed under duress". In other states they are all enforceable. You need to spend a couple of hundred bucks and have a lawyer give you advice on the risk profile. If you ignore the non-compete, possible outcomes are: (1) no one ever gives a crap and everyone gets on with their lives (most likely for a new Engineer); (2) they write you a (series of) threatening letters that you ignore and nothing ever happens; (3) they bring suit to recover lost revenue, but lost revenue is really difficult to prove to a court and you win and have to pay your legal fees; or (4) they sue you and win and you have to pay for substantial lost revenue and their court costs. The last one is the lowest probability and the highest cost, the first one is the highest probability and the lowest cost. You need to do a risk weight (with the help of an attorney) and pick a point in the risk-continuum that fits your risk tolerance.

David Simpson, PE
MuleShoe Engineering

Law is the common force organized to act as an obstacle of injustice Frédéric Bastiat

 

[lifeofnoregrets]

Thanks everyone, That makes me feel a little better. Off to the lawyers office to spend the kids Christmas funds.

Derek

 

[cvg]

"...establishment of a directly competitive business..."
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.

 

[Compositepro]

Consulting a lawyer does not necessarily reduce your risk. Risk is the probability and magnitude of a "loss". If you pay a lawyer you will incur a loss, albeit small. Then, his advice maybe wrong. His advice may be correct, but that will not prevent a trip to court to prove it. Your situation is very common. Competitive businesses hire from each other all the time. The lawyer will not give you any guarantees and, as a result, you probably won't feel any better afterwards. You will probably find it more comforting to spend a few hours research on the Internet so you don't feel so ignorant.

 

[berkshire]

Derek,
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.

 

[lifeofnoregrets]

I can definitely get others to testify in court about the "sign or be fired" threat. I also have come to find out that other ex-employees have gone to work for competitors with out being sued but they were only technicians. They always treated me like I should be honored to work for them, working as an engineer that had not finished my degree yet. I just got the feeling they would "stick it to me" if they got the chance.

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.

 

[msquared48]

Best wishes, and don't be a stranger in the forums here.

Mike McCann
MMC Engineering

 

[lifeofnoregrets]

Are you kidding?! you are all my new best friends. lol

Thanks!!

 

[moon161]

Potentially damaging disclosure, and handle that seems like a name. I've been googled after leaving and employer. I'd ask for an 'undo' on this thread.

 

[lifeofnoregrets]

No its not my name. I did just google my handle as I've used it before and sure enough it shows my name. How do I get an undue?

 

[TGS4]

Red-flag one of your posts (probably the top-one), and explain the situation to the site admin. They are very friendly and will gladly take care of you. You can either blow away the whole post, or change your username, or whatever else you might want.

 

[TheTick]

Not exactly bona fide legal advice... but... by now I would be working the new job with the non-compete filed away as a nearly-forgotten inside joke.

 

[zdas04]

I think you can just go to your profile and change your handle and all traces of the old handle will vanish from the site (who can say how many people have stolen copies the the thread on mirror sites that abound on the Interwebz). If that doesn't work, site management is pretty good about honoring reasonable requests (like changing your handle).

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

 

[lifeofnoregrets]

VIOLA!