3 Responses to “How binding is a non compete agreement, if my employer lays me off?”

  • Meghan:

    You signed the agreement, and the fact that they reminded you of it should be a reminder that they will press charges. And usually the court penalties for breakign those are VERy steep.

    It does not prevent you from earning a living. It prevents from earning a living in that career field. It also only prevents consulting on THAT software. It doesn’t prevent you from working for a competitor or on another piece of software. However, you should clear anything with HR before you accept any offers.

    Depending on your agreements, I have seen people go to jail and face criminal over breaking them.
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  • silvercharm516:

    Non-compete agreements have to be REASONABLE in their scope and nature.

    If you’re a doctor and you sell your practice to another doctor, it’s reasonable in both scope and nature to demand that the doctor not open another practice within 5-10 miles of the original practice. But telling them they can’t open another practice if the state is unreasonable and will not hold up in court.

    In your situation, it would be reasonable to say that you could not develop software for a direct competitor. (Say that "Coke" just layed you off… they could reasonably prevent you from going to work for "Pepsi", but they could not reasonably stop you from working for "AT&T".)

    A non-compete agreement is just that… it prevents you from COMPETING against them. It doesn’t and can’t legally prevent you from working.

    You should use your common sense here and find a job that doesn’t compete with them. If they pursue the non-compete because you took a job somewhere that doesn’t compete with their business, then you’ll probably need to hire an attorney to fight the case. I just can’t see any attorney for them telling them that it is reasonable to say that you can’t work for a year.

    Go find yourself a job that doesn’t compete with them and you’ll be fine.
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  • Yup:

    Depends what it says. It seems odd that it would be phrased in a way that you would have to hold up your end of the agreement after they’ve terminated you.. but it’s possible. Have a lawyer review the thing to see if they think it would hold up.

    Also, look into the penalties for breaking the agreement.. they might be worth it or they may be something you really want to avoid.

    But anyways, you can get unemployment checks for the next year, while still being able to work about 20 hours at a part time job. Then you can devote your extra free time to developing some new skills, an internet business, or whatever.
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