In this Issue:
Non-Compete Agreements
Are they enforceable? In most states, including California and New York, it’s very difficult to prevent a worker, at any level, from leaving to join a rival company. The most high profile example is HP’s decision to drop its lawsuit against former CEO, Mark Hurd, and Oracle Corp. Even though California is the toughest place to enforce a non-compete agreement, it did force Hurd to give back a large bonus package to HP.
Here’s what you need to know and do:
- Check your state’s policies. Every state is different, so it’s important to know your rights and the rights of your employer.
- Consult with a lawyer. If you’re unsure about signing, a lawyer can help you. By signing, you do not waive your rights under the law. The law still applies to you and you will be protected. A half-hour consultation with an attorney is worth the money when you think about the cost of your career.
- Quid pro quo. To be enforceable, the agreement must be signed in return for some form of remuneration e.g. job offer, merit increase, promotional increase, bonus, etc.
- Be smart. Don’t take information with you, especially if it’s confidential. Don’t convince former employees to follow you. Don’t take your customer list. You could be guilty of unfair business practices and create a real can of worms by motivating your employer to file suit against you and your new employer.
- The agreement should be reasonable. Restrictions should be narrowly defined in terms of scope, duration and geography. They should not cover products, customers or technologies outside the scope of the job. Be leery of signing anything that extends beyond two years. Negotiate specific product market details and geography.
- Avoid a legal battle. Your employer most likely has deeper pockets than you do. Negotiate upfront, retain originals of all signed paperwork and note the details of any meeting on the subject. Be prepared. Know your rights. Your livelihood is worth fighting for, but it is still best to avoid litigation.
Once you have negotiated a fair and reasonable agreement that reflects the specifics of your job, be prepared to honor it. Otherwise, your new employer will have reason to question your integrity and trustworthiness, which is not a good way to start a new job.
Bob Harrington Associates 