Non-compete agreement, or termination! 8

[JigaWatt]

A Mechanical Engineer friend of mine works for a company who designs UAVs. Recently they told their engineers they have to sign a 1 year non-compete agreement, meaning they cannot work for any other company associated with UAVs for 1 year after termination for any reason. If he doesn't sign, they will plan on replacing him. He isn't sure what to do. Any advice? How easy is it to enforce a non-compete agreement? Can they legally fire him for not signing this agreement?

Thanks!

 

[RDK]

JOM

Yes you have the right to pick your employer.

There are limits to this right. The main limit is that the employer also wants you to work for them. (Another is being legally able to work in that field and in that jurisdiction.)

If the employer wants a non-compete agreement and is willing to make this a condition of employment, then you have a choice.

That choice is if you want to be limited in future employment or limited in current employment.




Rick Kitson MBA P.Eng

Construction Project Management
From conception to completion

http://www.kitsonengineering.com

 

[GregLocock]

My employer occasionally asks us to sign all manner of strange documents, which are retrospective or additional terms and conditions for our contracts. My solution is to exploit the inertia of large organisations. I cross out the bits I don't like, add other paragraphs, countersign them, and send that document in, having photocopied it.

I think I've had 4 of these of any significance in the last ten years. In two cases I won the ensuing argument, in the others I never heard any more about it.

The ugly one was relevant to this when they claimed first dibs on ANY invention I made while employed by them. At a previous company I had been asked to sign the same thing in my initial employment contract, and negotiated an additional sensible clause allowing me to do the stuff I was interested in outside of work. What got my goat with the ugly one was that this was introduced retrospectively, I took that one right the way up to VP level. I ended up not signing anything!

Cheers

Greg Locock

 

[RDK]

Greg

That’s one of my favourite negotiating tactics. Simply ink amend the agreement given to you to sign and send it in.

I will use it if I am simply given a form contract to sign or if I don’t like the wording of a contract in any way.

My experience is similar to yours. Often you never hear anything about it afterwards but at least your position is then clear and in writing.

I have done this when buying used cars. Around here it was common for the warranty on a used car to be 50-50 for 30 days. (Split any repairs for the first 30 days of ownership.) I once amended this to read 100% dealer paid for 90 days. The sales manager could not believe that a 17 year old was ballsy enough to do this and signed the contract.


Rick Kitson MBA P.Eng

Construction Project Management
From conception to completion

http://www.kitsonengineering.com

 

[CSEllc]

After reading most of the responses, my initil thoughts were similar to HDS. Your friend is probably not the only one they (the company) are forcing to sign the agreement.

A few of them should get together and speak to a good labor attorney. Give him all the facts and let the attorney give them his opinion of the law as it relates to your state and situation.

Granted most contracts are not enforceable if signed under duress but do you want to be the one sitting in a court room arguing this while you pay your attorney $300.00/hour?

It is like that old FRAM oil fgilter commercial......Pay him now or pay him later. I would rather pay a small consultation fee now rather than the legal fees of defending yourself later.

 

[CSEllc]

PS....If the agreement is "enforceable".....I would rather look for a new job than sign it.

That's my 2 cents.

 

[jetmaker]

Non-compete contracts are a reasonable thing depending on the field and sensitivity of the work being done. Often Canadian courts have upheld such contracts as long as they do not reasonably impeed the employee from making a living. So, if you are a civil engineer, the court would likely uphold such a contract saying that it does not cause undue duress on your ability to find employment as a civil engineer. That is assuming that they don't include an unreasonable geographic location... say.. all of Canada.

However, if you are specialized in a field, say computer chip design, such a contract would not likely be upheld if the only potential employers were located in the same region.

So, if you feel that your skills are easily transferable to another industry, or sector of the existing industry, signing such a contract would not be a cause for concern. However, if you work/live in a small city, where employment prospects are limited due to the industry sector, then seek a lawyer's advice on the validity of such a contract and/or renegotiate with your employer compensation for termination not initiated by you.

jetmaker

 

[scherry]

I did several of the things mentioned above, I did not sign it until they dragged me into the bosses office and made a big stink (six months after it was issued)and then i amended the copy I signed and the one I kept, because several of my clients had been MY clients when i was "bought" by the firm who wanted the noncompete, and I knew full well that if I left, these clients would follow me. They might not terminate the work they did with my old employer, but they would still call on me to provide services as long as I was still active in engineering. I did agree not to actively seek to cut out my old firm, but then i knew I did not have to. When I did leave for another state, the work my old firm did for my clients dropped to almost zero, although in one case there was a trend in that direction even before i left due to internal issues with that client. Since I went out of state, the issues were moot - they would not call on me from this far away.

one other note on this topic, we once had a client, a hospital, who wanted us to sign a "non-compete", saying that we would not do any work of the same or a similar nature at any other facilites for a period of 1 year...this was not, mind you, anything fanc. It was replacing underground fuel tanks, and we already had half a dozen other jobs doing the same thing at other facilities. We informed them politely that we could not stop doing structural engineering at hospitals just because we worked on one little job at thier hospital. we did not laugh till we were in the car. We also did not sign the contract as it was written.

 

[28021973]

A company can make changes to your contract at anytime, providing that the terms are reasonably practicable. You must respond to the change in some way even if it oral, as it can be assumed you have accpted the terms. Best thing to do here is to get a solictor to brief the contract and send it back to the company, hopefully they will back down when they see it has been checked over by a legal practioner.

 

[jmw]

In the Uk any significant change in contract terms can be considered as a constructive dismissal.
I have hedged a bit with the term "significant". In the Uk there is ACAS (

http://www.acas.org.uk)

where:

What is a constructive dismissal?
This is where the employer's breach of the employee's contract of employment is so fundamental that it goes to the root of the contract and justifies the employee resigning. In any tribunal complaint of constructive dismissal the employee must show that the employer's action amounted to constructive dismissal.

In dismissals connected with the transfer of undertakings, the employee only has to show that the transfer detrimentally affected his or her terms and conditions of employment.

Now it might be that introducing such a clause could be so considered.

 

[NOx]

JigaWatt
Good thread, I believe this problem affects 99% of all of my friends and collegues within the field of science/engineering, however after being "caught" by this myself in the UK I took the matter to a Solicitor and he explained that this is a restrictive practice, disabling a person from earning a reasonable living and would not be enforced by any court he could name!
You can't be sacked for not signing the form but it could be a Career Limiting Move if you don't, also when signing your contract if the non-compete agreement is 6 months or less, request that your notice period is the same and tie the two together, request garden leave and let your employer pay...

NOx

 

[jmw]

While you are at it, see if they will make your redundancy terms based on actual salary and not government minimums... they want something from you and you want something from them. If you are any kind of decent above the minimum pay this is important because you need to live while looking for a new job. You can also try for a guaranteed minimum severance pay and this is important if you don't have many years in.

You'd be surprised how far sighted management are not! They may make all sorts of agreements based on a future set of circumstances "that will never happen".

Ask for a lot of stuff they will never agree to and negotiate down.