Laid off and trying to avoid it in the future

This happens so often-six months ago they told us there was enough work to keep 150 people working for 10 years or more. Last week they said business was slowing. At 9:20 they said they were trying to pull work form a sister company and generate more business but they would "be looking at employment levels." At 10:12 I got an IM telling me to come to the President's Office.

No need to tell the rest. As soon as I got the IM I didn't even need to see the cards, my flush was beaten by a full-house on the river. Actually I knew I was rivered when they told us to report to the 9:15 meeting.

But this is all the past. They said it was a "layoff" and I could be called back. This isn't US Steel in the 1950s. I don't expect to see the inside of the building again.

So, enough boring all of you, onto my questions.

First, what does anyone know about non-compete agreements? I signed one for a bonus payment, it is a bit tight but not watertight. I know that first they have to catch me, then they have to want to pursue it. Then I know if I am not going after their clients it is harder to pursue. When I ran the pest control place people broike them all the tie and the lawyer told me unless I wanted to take a $10K charge to maybe win I should fugheddabaddit. But there it was a matter of a few thousand in lost sales, here it can be five figures. But I would not be taking their clients, merely plying my trade elsewhere.

Second, my plan was for this job to be "the last 'job' I would have." Not that I would retire, but that I would be a day-rate landman; closing notary public; and a few other schemes always in various stages of development so I had some kind of steady income. The plan was to do this in 2-4 years. Not sure if I can pull it off now, but the notary supplies are on the way to get some income flowing. Anyone left the work world and "gone independent" have any advice on anything from the mental state you need to keep yourself in to succeed.

Is the No Compete clause valid if they terminate the contract (rather than you terminating it?). Seems a bit odd if they can enforce a no-compete clause, but also not pay you and dispense with your services. I have no idea of your area, but often this is something you can discuss during the termination procedures (after they give notice, and while you do the clean up and get out stuff). That was my experience, in a different country under different laws.

Quote: thecesspit

Is the No Compete clause valid if they terminate the contract (rather than you terminating it?). Seems a bit odd if they can enforce a no-compete clause, but also not pay you and dispense with your services. I have no idea of your area, but often this is something you can discuss during the termination procedures (after they give notice, and while you do the clean up and get out stuff). That was my experience, in a different country under different laws.

It clearly says it does not matter who ends the relationship and they clearly said it stays in force, but with a "good luck finding a energy job in the first place" kind of statement implying there is nothing out there.

If that is legal or not I do not know. As I told a co-worker about a questionable item one lender had people sign, you can write all kinds of stuff and sign it, but if it is illegal it does not matter. I feel this is a gray area.

My hope is I can get an "on the road" assignment like last year (see my blog) in Northern PA or the Mid-West with paid room, food, and mileage and just wait it out.

If they're hurting for money, what are the chances they
would pay a lawyer to stop you. Like you said, they have
to catch you first, and then they would just tell you to
stop, or else. That could be a long way down the road, if
it ever even happens.

Layoffs don't necessarily occur because a company is hurting for money. I work for a huge company that also has a non-compete clause, and we've had several rounds of layoffs. The folks who were laid off went ahead and started working for our customers and the legal folk did nothing about it.

So I would go nuts and wait for the company to stop it.

If the case is you are not going in to a competitive industry there should be no issue.
Most corporations give you time to review the release. I did HR in Pharma and my company would not allow you to sign the severance agreement at the time of termination. Best bet depending on how much money is involved is to reach out to an employment attorney.

I just finished a year long non compete which was great since I never planned on returning to Pharma. Went for a career change.

Best of luck.

Here's what I know about legal documents:

I'm not a lawyer, nor do I play one on the internet. And more importantly: Nor are most people who would respond to a legal question on an internet forum.


But for a layman's response:

Yeah, they probably won't go to much effort or expense if they suspect you've violated the non-compete agreement.

Then again, don't expect your phone to ring if they have a re-hiring spree.

Quote: AZDuffman

First, what does anyone know about non-compete agreements? I signed one for a bonus payment, it is a bit tight but not watertight. I know that first they have to catch me, then they have to want to pursue it. Then I know if I am not going after their clients it is harder to pursue. When I ran the pest control place people broike them all the tie and the lawyer told me unless I wanted to take a $10K charge to maybe win I should fugheddabaddit. But there it was a matter of a few thousand in lost sales, here it can be five figures. But I would not be taking their clients, merely plying my trade elsewhere.

Second, my plan was for this job to be "the last 'job' I would have." Not that I would retire, but that I would be a day-rate landman; closing notary public; and a few other schemes always in various stages of development so I had some kind of steady income. The plan was to do this in 2-4 years. Not sure if I can pull it off now, but the notary supplies are on the way to get some income flowing. Anyone left the work world and "gone independent" have any advice on anything from the mental state you need to keep yourself in to succeed.

I am an attorney in Las Vegas and I am very familar with Nevada laws regarding no compete agreements. I am actually in the middle of a trial regarding a non-compete agreement. PM your non-compete agreement or PM me and I will give you my email address. I will review it for you and let you know where you stand.

Quote:

my plan was for this job to be "the last 'job' I would have."

I feel for you, been there. The landscape can sure change on a guy in a hurry. One learns there are no guarantees in life, not in the US or anywhere else.

Don't know how to advise you on the non-compete.

My field has been a steadily shrinking niche. Those companies with similar business plans have all struggled, many going out of business. The remaining work force all hate each other as they try to hang on; this was the worst part. Actually, I was unable to navigate the intrigue.

I've taken a lower paying job in a different field. My work situation has improved remarkably; it's something to be able to trust fellow employees to a certain degree now. We actually look out for each other! The money is not as good but it started to stink in the old field too, and did so for years. If any of this sounds familiar you will be glad to be out of there. Draw your unemployment.

This is not legal advice, but non-compete clauses are generally unenforceable. It depends on your state, but where I live they are extremely disfavored, especially for important jobs like doctors, accountants, etc.

I would say follow your first inkling and fight it.

Quote: teddys

This is not legal advice, but non-compete clauses are generally unenforceable. It depends on your state, but where I live they are extremely disfavored, especially for important jobs like doctors, accountants, etc.

I would say follow your first inkling and fight it.

Agree. But you don't have to fight it. just ignore it. Unless you are soliciting existing clients to leave and go with you, you are at little risk. If you are trying to take clients from your old firm to a new firm, then it might be worth it for the old firm to sue you.

Why would you not honor the agreement?

To do otherwise shows a lack of honor.

You knew what it said when you signed it.

It's a contract: time to man up.

Quote: SOOPOO

Agree. But you don't have to fight it. just ignore it. Unless you are soliciting existing clients to leave and go with you, you are at little risk. If you are trying to take clients from your old firm to a new firm, then it might be worth it for the old firm to sue you.

FWIW, as an HR professional, I agree with what Soopoo says.

Quote: AZDuffman

First, what does anyone know about non-compete agreements? I signed one for a bonus payment, it is a bit tight but not watertight. I know that first they have to catch me, then they have to want to pursue it. Then I know if I am not going after their clients it is harder to pursue. When I ran the pest control place people broike them all the tie and the lawyer told me unless I wanted to take a $10K charge to maybe win I should fugheddabaddit. But there it was a matter of a few thousand in lost sales, here it can be five figures. But I would not be taking their clients, merely plying my trade elsewhere.

It looks like you're already getting some legal advice from other members. IANAL so I won't advise but for the caution that the laws regarding non-competes in your state (presumably Arizona) may be different than the laws in other states, and the right approach is to talk to an attorney licensed to practice in your state.

Quote:

Second, my plan was for this job to be "the last 'job' I would have." Not that I would retire, but that I would be a day-rate landman; closing notary public; and a few other schemes always in various stages of development so I had some kind of steady income. The plan was to do this in 2-4 years. Not sure if I can pull it off now, but the notary supplies are on the way to get some income flowing. Anyone left the work world and "gone independent" have any advice on anything from the mental state you need to keep yourself in to succeed.

I left corporate employment for independent work just over three years ago. I had enough business booked to carry me for six months, and then I just split my time between working and finding new work.

If you're independent, there will be times where you have so much going you'd need to work more than 24-hour days to make a dent. There will also be times where you don't work at all -- for weeks -- and you sit at your desk wondering what happened. For example, in two out of the past six months, I billed less than 5 hours each month. The other four months made up for it. My best advice on mental state is this: recognize that what I just described is going to happen whether you like it or not, and ask yourself whether you can accept it. If you can, commit to yourself that you *will* accept it, regardless of whether you're in the boom or bust cycle, and jump in. If you *can't* accept it, find a job with a steady paycheck. It's not worth driving yourself crazy if you can't cope with the swings in cashflow and work volume.

While the _legal_ enforceability of a non-compete agreement may be in question, you might have more to worry about the non-legal ramifications. Depending on what field of business you are in, you may be looking for a job in which all firms require that you sign a non-compete agreement. If that is the case, and the new company wants you to sign one, but you are already violating one from the previous company, then the new company may look askance at this and be hesitant to hire you.

I'm going to start a company that does everything.

I will hire everyone in the world that will come to my office for a salary of 100,000 annually. I will have them sign non-compete agreements when they walk in and then immediately fire them. I'll pay them for the 10 minutes it took them to fill out I-9, tax forms, and the non-compete. Then once they get another job, I will sue them.

I guess my point is, and I usually do not have one, is that it's harder to enforce a non-compete when you're the one being fired. The government doesn't want to be in the position of telling people they cannot work unless there is a good reason.

Quote: MathExtremist

If you're independent, there will be times where you have so much going you'd need to work more than 24-hour days to make a dent. There will also be times where you don't work at all -- for weeks -- and you sit at your desk wondering what happened. For example, in two out of the past six months, I billed less than 5 hours each month. The other four months made up for it. My best advice on mental state is this: recognize that what I just described is going to happen whether you like it or not, and ask yourself whether you can accept it. If you can, commit to yourself that you *will* accept it, regardless of whether you're in the boom or bust cycle, and jump in. If you *can't* accept it, find a job with a steady paycheck. It's not worth driving yourself crazy if you can't cope with the swings in cashflow and work volume.

I have been told this by friends and family, about the flucuations that is. You don't know if you will be eating chicken or feathers next month.

My bigger concern is that word could get back fast. I am in PA, actually. I already have a lead for day-work (28 hours after layoff-not bad!) but my "worry" is that olike many businesses, it is a small-world. Just a year and three courthouses but in all three of them either I saw someone from another place; they saw me first; or someone I was with saw someone they bumped into, in one case a state away. So it is not "if" they find out it is "when" they find out. I said and repeat that I would love to go back, but I do not expect to see the inside of the building again. Other issue is that the "sister company" they have is big. Not domminant, but big. Should I want to work there one day it could poison the well.

Or they might just not care.

My gut says they might not care, thought they will find out.

Such agreements are usually disfavored and if upheld are construed very narrowly. One famous non-compete contract was upheld despite it being world wide because Letorneau's business of massive heavy equipment was indeed a world wide business. Usually the agreements are disfavored and often a contract of adhesion without any opportunity to bargain.

Eons ago I once had to take some one hour "medical exam" for an employer and the clinic wanted me to sign the standard agreement not to sue them. I knew it was contrary to public policy and utterly void and non-enforceable and I would not sign it.

Same thing a few years later when a hospital wanted me to indemnify them for damages in order to give me a copy of my medical records. I scratched that out too and told them "you are under a statutory duty to provide me with a copy of my medical records upon demand and may not avoid that duty by even asking for a release of liability". When they start hearing lawyer talk, they get worried!

My advice on non-compete agreements:

1.) It is true that non-compete agreements are generally disfavored by the courts.

2.) Non-compete agreements are almost always UPHELD by the courts so long as they are considered reasonable and not forced into under duress.

3.) The reasonable factors: The court will examine some of the following factors, (a) length of employment, (b) position within the company, (c) basis of the non-compete agreement, (d) duration of the non-compete following termination, (e) geographical limitations, and (f) whether there was any compensation at time of termination, to name a few.

4.) Case law has upheld non-competes for 5 years and geographical limitation within the entire US. If the court believes the former employee could compete, take away business from the employer, or reveal trade secrets then the court will lean towards upholding the non-compete.

5.) Bottom line: while the courts say that non-compete agreements are generally disfavored if an employer attempts to enforce the non-compete and the case ends up in court the judges almost always side with the employers.

6.) Further, it is very difficult to overcome the freedom of contract theory. You agreed to work under those conditions, you could have turned down the job, you could have attempted to negotiate different terms, but in the end the employee agreed to the non-compete so that they could have a job.

I have won cases against employers attempting to enforce the non-compete, but almost always on a technicality, such as the basis of the non-compete was trade secrets, but employees who refused to sign the non-compete agreements were allowed to continue working for the employer. Therefore, the court determined that the basis for the non-compete was not valid because the employee that refused to sign the non-competes simply could reveal the trade secrets, so in theory the trade secrets were already exposed and therefore the non-compete agreements could not be enforced.

Quote: MrV

Why would you not honor the agreement?

To do otherwise shows a lack of honor.

You knew what it said when you signed it.

It's a contract: time to man up.

as to this, since you were terminated the matter of honor is void in my book.

Quote: konceptum

While the _legal_ enforceability of a non-compete agreement may be in question, you might have more to worry about the non-legal ramifications. Depending on what field of business you are in, you may be looking for a job in which all firms require that you sign a non-compete agreement. If that is the case, and the new company wants you to sign one, but you are already violating one from the previous company, then the new company may look askance at this and be hesitant to hire you.

I sign non-compete agreement with every employer every time I am hired. Most of these employers compete with each other. It has never been a problem. No, they are not hesitant to hire me, they actually promise that they would pay my legal fees (and any fines I may end up having to pay) if I ever get sued for violating somebody else's contract.

Where I work, we recruit people from competing companies all the time. The corporate lawyer has told me that these non-compete agreements for people below Director level are not worth the paper they are written on.

Quote: odiousgambit

as to this, since you were terminated the matter of honor is void in my book.

Hm. Are you saying that the only honorable thing to do for an employer is to keep paying anyone they have ever hired until the guy quits or dies?

Unless the agreement says it does not apply in the event of termination by your employer, then it still is applicable.

Quote: FleaStiff

Same thing a few years later when a hospital wanted me to indemnify them for damages in order to give me a copy of my medical records. I scratched that out too and told them "you are under a statutory duty to provide me with a copy of my medical records upon demand and may not avoid that duty by even asking for a release of liability". When they start hearing lawyer talk, they get worried!

FleaStiff: Are you not a lawyer, but play one on TV?

Quote: weaselman

Hm. Are you saying that the only honorable thing to do for an employer is to keep paying anyone they have ever hired until the guy quits or dies?

I am saying AZ can forget any ethical issues and concentrate on practical ones as far as my view of the matter.

Thanks to one and all for advice on this matter. As it turns out I accepted a year-or-more contract with a large bank in their mortgage area early this afternoon.

The speed of it is kind of amazing, for those keeping score it was just 50 hours more-or-less between being told to pack my desk and offered this gig. I start early to mid April, the exact date changed from last time I talked to the recruiter and he said it may move a few days up or back again. Not a big deal if unemployment comes in anyways. Just enough time to enjoy myself, maybe go to Florida or AZ/LV a few days and be warm.

Holy crap, that WAS quick.

Did you even get a chance to apply for unemployment yet?

Congrats and best of luck!

What, you were able to get a job, in this economy, under President Obama? Say it isn't so???

Quote: DJTeddyBear

Holy crap, that WAS quick.

Did you even get a chance to apply for unemployment yet?

Congrats and best of luck!

Thanks on the last part.

I applied for UC but the approval letter clearly hasn't had time to come in the mail. I don't start until April as they need to hire 118 more people for the project. Looks like I will be helping to clean up some of the mortgage mess a famous lender left behind.

Now I get to enjoy that wonderful period between when you get the offer and when you start.

Quote: odiousgambit

I am saying AZ can forget any ethical issues and concentrate on practical ones as far as my view of the matter.

I don't think there are any ethical issues. There is a contract, that specifies a penalty for breaking it. There is nothing unethical about it - it is a normal choice - you either keep the contract, or you break it and risk being penalized.