Quote:
Originally Posted by Jay13
One of the most misunderstood legal concepts ever, in large part because only the eggregious cases end up going to trial.
Noncompetes are generally valid provided they are reasonable in scope (what you are prevented from doing), time (how long you are prevented from doing it) and geography (where you are prohibited from doing it).
Take a pharmaceutical rep in Dallas making $25k/yr. A prohibition on accepting a sales position anywhere in the medical field anywhere in the US for a period of 5 years isn't likely to fly. A prohibition selling pharmaceuticals in direct competition with those previously sold within a 25 mile radius of previous sales calls and which applies for a period of three months is more likely to stand.
Everything is relative. So when you're a CFO of a Fortune 500 company who has made 7 figures the last few years, a prohibition on employment with a direct competitor (e.g., CVS vs Walgreens) may be reaonable even though its geographic scope ends up being national when you are talking about a CFO position. That, plus the fact that failing to abide by a noncompete can result in you to forfeiting substantial nonqualified deferred compensation, such as unvested stock options, is why you don't often see high profile noncompete cases go to trial.
The only absolute with non-competes is that there is no absolute. So while I generally agree with your "bottom line", I don't necessarily agree with your cousin's opinion that they are worth less than the cost of the paper.
|
Nice write up. Before I went into business for myself, my last employer wanted me to sign one (I was a salesman). I told him, "sure, I'll sign, but since we are making our arrangement more formal, I'll also need an employment contract to go along with that non compete, and I want to know what I am being offered in exchange for signing the non compete (in addition to keeping my job." Well, that's where things went South. About a week later, after I refused to bow to pressure to sign the non compete, I was fired and escorted off the premises.
I thought in order to enforce a non compete, something of value (besides keeping your job) had to be proffered? Is this right?