Need Opinion


#1

I work for Company A. Company B is a direct competitor. My company (Company A) hired a key person from Company B stating they want to “destroy the competition”.

For my own reasons related to some issues at Company A I have been seeking work elsewhere. I interviewed at Company B (our competitor). I re-read my Employment Agreement with Company A and it does state that I will not work for a competitor for 1 year. First of all, I am not sure if it is really legal to restrict someone’s work options in such a manner. Secondly I find it hypocritical to hire a person from a competitor and seek to “destroy the competition” and at the same time have a policy forbidding your own employees from working for a competitor!

So now I am left with a dilemna if offered the job as to whether I should accept it. It would shorten my commute and it seems like a better situation for me.

Any thoughts appreciated.


#2

In most states, non-compete agreements are enforceable to a greater or less degree. If you got to work for company B, you can expect to be sued and incur some rather hefty legal expenses even if you win the case. Read your agreement and, if you change jobs, find one that will not violate it.


#3

I don’t know if I can help you or not but I think I might be able to provide some direction in some way.

I work in Insurance, let’s call my company Company C (so as not to be confused with your companies.).

My previous manager was contacted by someone from Company D and they offered him a position with more opportunity for advancement, more time with his family, etc. He was an “icon” at Company C and has many many friends there and is well respected in general in the industry due to his work as an arbitrator (which is volunteer) and other dealings.

He chose to take the position with Company D.

The policy of Company C is, if an employee accepts a position with Company D and gives notice, they are immediately escorted out the door and someone else boxes up their items. This is to protect against any form of insider trading, problems with business ethics, etc. It is to maintain everyone’s integrity.

In the case of my manager, they actually called a meeting and gave him 24 hours due to his known integrity. During our meeting I joked that he might come back and “steal” some employees. The other higher-level manager’s response was to shrug and respond, “That’s part of business.”

I do not believe that an agreement to not work for a competetior for 1 year is ethical or enforcable, especially in our market. Maybe this depends upon the type of business, however.

I do think that Company C’s response to immediately escort someone who has accpeted a position with Company D, or B, or X, etc, is ethical. I do believe they still pay the typical severance given to someone who leaves for a non-competetor.

As far as “destroying competetion”…well, in what way do they allegedly intend to do this? By sending in a corporate spy? Or was it really in jest? Are they saying that if they take another companies best employees the company will fold? Maybe, or maybe they will hire new talent. This is actually typical market business.

In any case monopolies are actually illegal…that said, I have no idea how cable companies and phone companies operate as they do but that is a topic for a different thread.

You may want to contact an attorney…they can often answer questions without making you pay a fee. Also some phoen books offer services with local attorneys which give answers to common questions and I imagine this woudl be an easy one for them to answer.

I am praying for you as you work to discern the right path.


#4

[quote=Coder]I I re-read my Employment Agreement with Company A and it does state that I will not work for a competitor for 1 year. .
[/quote]

get a lawyer and find out if non-compete agreements are legal in your state, if so, you may be in for an expensive legal fight.


#5

It seems that one reason judges may uphold a non-compete is to protect confidential information or trade secrets.

In my case, the competitor (that I interviewed with) is actually ahead of my employer and in fact my employer seems to be tracking to their features. (This is another reason why I find the non-compete hypocritical.) Therefore, I think a judge might consider that I cannot provide much information to the competitor (beyond general skill and knowledge).

I’ll see if the competitor offers me the job and then decide. Meanwhile, I am looking into other employment.


#6

[quote=Coder]It Therefore, I think a judge might consider that I cannot provide much information to the competitor (beyond general skill and knowledge).

.
[/quote]

do you really have time and money to spend finding out what a judge would decide?


#7

Did you sign an agreement with Company A ?? If so, I think you are morally bound by your word - if not legally so.

If I were the person responsible for hiring people at Company B, I wouldn’t hire you if I knew that your were going back on your agreement with company A - for fear that if you weren’t trustworthy with company A, you wouldn’t be trustworthy at my company either.


#8

Company A has hired Company B’s key person. It is hypocritical.

I am generally not bringing to Company B any major trade secrets and in fact as I pointed out, Company A is tracking to Company B. I am offering my general talent and some experience.

At that same time, as you indicate I agreed to it. Also two wrongs don’t make a right. So perhaps the right thing to do is not take the job. If I do refuse it, it will be hard to do because it would be closer to home.


#9

[quote=Coder]Company A has hired Company B’s key person. It is hypocritical.

[/quote]

Just becuase your company may be acting in a hypocritical manner does not free you from your responsibilites. If you signed a non-competition clause you are bound to it.

Also, technically speaking, it is not your company that is being hypocritical. If this key individual signed a non-competition clause with the other company then he is at fault, not your company.

I am generally not bringing to Company B any major trade secrets and in fact as I pointed out, Company A is tracking to Company B. I am offering my general talent and some experience.

Non-competition clauses have nothing to do with this issue. This issue would be covered by a confidentiality clause which would not stop you from working for another company but from given secrets to them if you did work for them.

Non-competition clauses are just that, you would leave your company, which would hurt them because they would lose an employee and have to train a new one while their competition would gain a useful person who knows the business.

At that same time, as you indicate I agreed to it. Also two wrongs don’t make a right. So perhaps the right thing to do is not take the job. If I do refuse it, it will be hard to do because it would be closer to home.

This seems like the right thing to do. I would not even have interviewed with them. If your company finds out it could be a cause for termination.


#10

I appreciate everyone’s opinion. I don’t plan to take the job unless I can convince my employer to relinquish my obligations under the agreement or unless I find out that such an agreement was not valid to begin with or is not legal.

Otherwise, I will seek work elsewhere.

Thank You.


#11

[quote=ByzCath]Also, technically speaking, it is not your company that is being hypocritical. If this key individual signed a non-competition clause with the other company then he is at fault, not your company.
[/quote]

The hypocrisy is in principle not letter. To say that you are thrilled to hire a competitor’s key person and that you want to “destroy the competition” and at the same time prohibit your own employees from seeking to work for a competitor is hypocritical.


#12

I have indicated to Company B that I won’t be able to work for them unless I can come to an agreement with Company A. Meantime, I’ll seek work elsewhere. If you remember this in your next prayers I would appreciate it.

I do want to do what is right. It’s just very difficult to accept when my company is practicing the very thing that they prohibit their employees from doing.


#13

[quote=Coder]Company A has hired Company B’s key person. It is hypocritical.

I am generally not bringing to Company B any major trade secrets and in fact as I pointed out, Company A is tracking to Company B. I am offering my general talent and some experience.

At that same time, as you indicate I agreed to it. Also two wrongs don’t make a right. So perhaps the right thing to do is not take the job. If I do refuse it, it will be hard to do because it would be closer to home.
[/quote]

Before refusing a good job, I’d check with your state attorney general’s office (maybe they have an interactive website?) or go to your local library where one of the librarians could help you find out if your contract agreement is legally binding or not. You aren’t privy to any company secrets nor would your employment at the other company constitute any real competition, so if it isn’t illegal, I’d take the job at Company B.


#14

[quote=Coder]I have indicated to Company B that I won’t be able to work for them unless I can come to an agreement with Company A. Meantime, I’ll seek work elsewhere. If you remember this in your next prayers I would appreciate it.

I do want to do what is right. It’s just very difficult to accept when my company is practicing the very thing that they prohibit their employees from doing.
[/quote]

What helps me in these types of situations is focusing on myself. Am ***I ***doing right or wrong? It doesn’t matter so much what someone else is doing if I’m too busy thinking about doing the right thing myself.

If your company was not being hypocritical, would you even consider breaking your agreement? There lies your answer.

Malia


#15

Thanks Della. I have also considered Carol’s (and Dave’s) point about the moral obligation to stand by my agreement and so I am basing my decision on that also.


#16

Thanks much for the input.

In that case, they might be a more honest company to work for and I may not want to leave to begin with.


#17

Non competition agreements will generally be upheld if they are not inordinately long (one year does not appear to be), geographically reasonable (this would appear to be the case), and have a rational basis (requiring a secretary to not take a secretarial job in the area would make no sense, as they would have generally no knowledge that would be transmitted; the same for a clerk or warehouse person).

Whether your job would potentially cause harm to a competitor may be open to question; it would probably depend on the level of creativity in your job as opposed to routine code work (I assume you are in software work).

That all said, two things strike me as troublesome. Your business, you say, plays follow the leader, and Company B is the leader. Then you say that Company B has lost a key employee to your company.

If this individual is truly a key employee, then a) Company B may not continue to be the leader, but yours may become the leader, at which point you are considering changing from one second rate company to one that will soon potentially become one; b) if yours has actually acquired someone who could put Company A in the position of destroying Company B there is no logical reason to go to work for a company that may be out of business relatively soon; and c) if you are not a key employee, other than your dissatisfaction with Comany A re: their ethical programs, and a shorter commute, what is there to offer to Company B that they don’t already have?

c) above has more to do with the potential legal ramifications of a fight about your non-competition agreement. If Company B knows about the non-competition clause, they are not likely to hire you unless you are a key employee, as they could get drug into the fight too, and have little reason to risk a battle; in addition, should you move over and Comapny A starts legal process, you are apt to find yourself out of work at Company B.

Non competition agreements are a fact of life among employees with trade secret knowledge or critical skill. You should have been aware of this when you hired on.

Even if an attorney tells you that the clause is unenforceable, I doubt you will find one that would say that the company will not try to enforce it, which means that even if you win, you will probably lose. Unless you know of a pattern of behavior on your companie’s part that they have consistently not enforced it against employees similar to yourself, you can only guess as to what they will do.

Approaching them to request a waiver is more likely to reult in your dismissal that a waiver, so that would not seem to be a wise option either.

Net result is that you seem to have three options:

  1. stay where you are.

  2. try to move (either asking for a waiver, or going without one) and take the risk of being unemployed for at least a year.

  3. find a different line of work.

Realize that 2) may hold some additional problems; if you leave without a waiver and get caught up in an employment lawsuit, you may be “snake bit” in that future employment in your field may not be forth coming, whether because you are seen as not loyal or not wise.


#18

[quote=Coder]Thanks Della. I have also considered Carol’s (and Dave’s) point about the moral obligation to stand by my agreement and so I am basing my decision on that also.
[/quote]

I will pray for you Coder. I believe that taking the moral high ground is very difficult - espcially in the business world where so few do… but you will be blessed for your faithfulness.

:slight_smile: CM


#19

Thank you so much Carol - and all.


#20

Update: the potential employer and I have agreed not to proceed due to my non-compete agreement.


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