Need some input on non-compete agreement

[JJ650]

I need to know some ins and outs of non-compete agreements. I have never been commited to one by my previous employers.

I am negotiating a position with a new company that wants me to agree to a non-compete. The company is based in OH but I will be working from SC.
In the agreement l will not be permitted to work for another similar company within a sales or management role for a period of 18 months past my last day of benefits.

Since I live in a right to work, right to fire state I will also be paid a "bonus" for signing.


Are there any sort of "gotcha" loopholes that I need to know? What is a typical bonus for signing. Is it just some random number or should it be based on a percentage of my salary?

What do the ATOT gurus think?

 

[Skitzer]

What line of work are you in?

 

[Slew Foot]

ive been told those are largely unenforceable

 

[highland145]

http://www.scnoncompetelawyer.com/basics/

(3). not unduly harsh and oppressive in curtailing the legitimate efforts of the employee to earn a livelihood;



Unenforceable in my industry.

Is OH a big union state?

 

[mrrman]

I would never sign a non compete agreement...they are not the worth the paper they are printed on

 

[Wreckem]

ive been told those are largely unenforceable

Depends on the state and how its drafted. Nationwide non competes are typically going to get tossed in most if not all states. Most only allow for regional non compete clauses. Some states like CA severely restrict them and only allow them for high level stakeholders.

 

[JJ650]

What line of work are you in?

Steel forging business with a pretty niche forging ability. Not too many companies in the US that are able to forge these products I will be selling.
My specific title would be Outside Sales Rep/Territorial Sales Manager.

 

[JJ650]

http://www.scnoncompetelawyer.com/basics/

(3). not unduly harsh and oppressive in curtailing the legitimate efforts of the employee to earn a livelihood;



Unenforceable in my industry.

Is OH a big union state?

Yes they are...in fact, they are having a strike at the company I will be working for.

So, what is the definition of "unduly harsh"?? 18 months seems to be a longtime not being able to do what I know how to do. Granted steel forging in my neck of the woods is not a very prevelant industry, but it's what I know. The clause does specifically state not being able to work for anoter forger with the same capabilities.

 

[momeNt]

Non-competes that are very broad as far as the geography is concerned are typically not enforceable. I'm not sure how it works with national markets and a national employer though. Undue hardship on the employee is also a concern, and this would basically bar you from working in the field entirely, usually it is supposed to be field + a geographical area that makes them enforceable.


Edit: Non-competes are best enforceable when an owner is selling a business - as courts finds that this type of non-compete best serves the public.

 

[highland145]

Steel forging business with a pretty niche forging ability. Not too many companies in the US that are able to forge these products I will be selling.
My specific title would be Oustside Sales Rep/Territorial Sales Manager.

Like I said, they can not keep you from earning a livelyhood. That should go double because of your specialty.

 

[highland145]

Yes they are...in fact, they are having a strike at the company I will be working for.

Having a union would make it easy for them to enforce it.....in OH.

 

[gorcorps]

I would never sign a non compete agreement...they are not the worth the paper they are printed on

Huh? If they're not worth anything then why not sign it? Apparently you'd have nothing to lose if they're truly that worthless.

 

[momeNt]

Huh? If they're not worth anything then why not sign it? Apparently you'd have nothing to lose if they're truly that worthless.

Legal headache when they try to bring a suit against you and you have to defend it.

 

[JJ650]

I wonder if I should bargain for larger "bonus" for signing. I guess having them pay me to sign would uphold it on their end if things went bad?

 

[Uppsala9496]

I had to sign a non-compete along with a binding arbitration agreement.
Mine is 18 months. I do have the right to go to a competitor, however I am not allowed to do any work for a competitor on an account that is currently with my current employer.
I'm an insurance underwriter & broker.

And yes, this is very enforceable. An old boss of mine (2 jobs ago) worked for the company I am currently at. When he left he targeted business he had previously worked on.
He ended up losing in court when he was sued. $250,000 or so in damages and he then had a master list of accounts he was no allowed to target issued by the court.
Guy is an asshole so it serves him right.

 

[JJ650]

I had to sign a non-compete along with a binding arbitration agreement.
Mine is 18 months. I do have the right to go to a competitor, however I am not allowed to do any work for a competitor on an account that is currently with my current employer.
I'm an insurance underwriter & broker.

And yes, this is very enforceable. An old boss of mine (2 jobs ago) worked for the company I am currently at. When he left he targeted business he had previously worked on.
He ended up losing in court when he was sued. $250,000 or so in damages and he then had a master list of accounts he was no allowed to target issued by the court.
Guy is an asshole so it serves him right.

Mine is 18 months as well. The geographic area I can't touch is huge though. Basically, drawn a line from the top of NC/TN, all the way over to Cali (coast to coast). The area under that is my territory.
Seems a bit harsh if you ask me.

Here is the clause:


5. Non*Competätion. Employee agrees that (1) during employment with XXXXX, and for eighteen (18) months after Employees employment termination date or eighteen (18) months after the date on which severance benefits provided to Empîoyee by XXXXX ends (whichever is later), Employee wilt not directly or indirectly, perform any duties or services similar to those provided for XXXXX (whether advisory, consulting, employment or otherwise) as a salesperson, sales manager or in a similar sales position, in a Competitive Business where Employee directly or indirectly sells, or provides customer service to customers purchasing products simiìar to and in competition with those with which he dealt while employed at XXXXX in the geographical area where Employee acted in a sales capacity; (2) for the same period of time, Employee will not directly or indirectly solicit, divert, or attempt to divert from XXXXX any customer of XXXXX with whom Employee had contact during employment with XXXXX regardìess of any resulting sale; and (3) for the same period of time, Employee will not directly or indirectly solicit, divert or attempt to divert from XXXXX, or any business unit of XXXXX, any employee of XXXXX, or any business unit of XXXXX.

“Competitive Business” means the design, engineering, manufacture, marketing, distribution. sate and servicing of slewing bearings and seamless forged steel and non-ferrous steel rings. Competitive business also includes any new or acquired products which XXXXX designs, engineers, manufactures, markets, distributes, sells, or services following the effective date of this agreement.

 

[highland145]

When he left he targeted business he had previously worked on.

That would do it.

 

[AreaCode707]

Unenforceable is one thing, impediment to hiring is another. I had a company decide not to make me an offer recently because they were worried about being sued by my company; they would have won but the level of effort in going down that road was high enough to dissuade them.

 

[bradley]

ive been told those are largely unenforceable

Especially in right-to-work states without trade secrets to protect... pretty tough.

 

[Puppies04]

I would never sign a non compete agreement...they are not the worth the paper they are printed on

Surely that is even more of a reason to sign one, keep your employer happy whilst happy in the knowledge that you could tell them to go suck a fat one if they ever tried to enforce it.

 

[KlokWyze]

ive been told those are largely unenforceable

Yeah...... I mean, are they going to hire a PI, gather evidence, hire a fleet of lawyers, etc. just to sue you over working somewhere else?

Seems completely unreasonable. Maybe it's more for like not taking customers, business practices with you if/when you depart?

 

[KlokWyze]

I had to sign a non-compete along with a binding arbitration agreement.
Mine is 18 months. I do have the right to go to a competitor, however I am not allowed to do any work for a competitor on an account that is currently with my current employer.
I'm an insurance underwriter & broker.

And yes, this is very enforceable. An old boss of mine (2 jobs ago) worked for the company I am currently at. When he left he targeted business he had previously worked on.
He ended up losing in court when he was sued. $250,000 or so in damages and he then had a master list of accounts he was no allowed to target issued by the court.
Guy is an asshole so it serves him right.

BUT, the big thing here is because he was targeting customers of the previous employer.