YOU QUIT YOUR OLD JOB AND THE FIRST DAY ON YOUR NEW JOB YOU ARE ASKED TO SIGN A NON-COMPETE

Those slimy dirtballs! What do you do? What can you do?

There are no guarantees but many courts find this type of conduct to constitute “unclean hands” on the part of the employer and refuse to enforce the non-compete. The following case decisions reflect how the courts see this issue:

o An Arizona court refused to issue an injunction enforcing a non-compete clause where the employee was not told of the necessity to sign a non-compete until after he quit his previous job and reported to his new job. The court found the employer’s conduct provided the employee with an “unclean hands” defense.

o A New Hampshire court determined that an employer acted in “bad faith” when it presented the non-compete agreement to the employee on the first day of his new job and refused to enforce the agreement which the employee felt he was required to sign.

o A Virginia court (Circuit Court in City of Richmond )has held that an employer who presented a non-compete agreement to an employee after already hiring the employee cannot later enforce that agreement due to the employer’s “unclean hands” and the lack of consideration given to the employee for signing the non-compete agreement.

So the point is this…just because you were forced into signing a non-compete agreement by a heavy-handed employer...you may still have valid and legal defenses to the enforceability of the non-compete.

TELEVISION AND RADIO TALENT

What about your local news anchor? Can she be held to a non-compete which will prevent her from walking down the street to a competitor and start working as a news anchor? Maybe and maybe not!

In Virginia, the same general principles apply to determining the validity of a non-compete in this type of situation. Virginia courts want to know:

· Is the restraint no greater than necessary to protect the employer’s legitimate business interest?
· Does the restraint unfairly restrict the former employee in his/her ability to earn a living?
· Is the restraint reasonable from the standpoint of public policy?

However, it appears that some states have laws which prevent the application of non-compete agreements in the broadcast industry. Those states include Arizona, Illinois, Massachusetts, Maine, and the District of Columbia, according to the American Federation of Television & Radio Artists.

Read a great analysis on this topic from the Oklahoma City University Law Review.

WHAT HAPPENS TO YOUR NON-COMPETE CONTRACT WHEN YOUR EMPLOYER IS PURCHASED BY ANOTHER COMPANY?

The scenario is not uncommon. An individual is hired by a company and enters into a non-compete agreement with the company. Things move along smoothly for a couple of years and then the employer/company sells out to another larger company. The new company tells all of the employees from the old company that they cannot leave their employment with the new company and enter into a competitive position with another company. Can they get away with this?

The answer depends upon where the original non-compete contract was signed and which state’s law will apply to the dispute. In Virginia, the general answer is that contracts for personal services (like a non-compete agreement) are not assignable unless both parties agree to the assignment. Virginia courts take the position that the employment agreement was entered into based upon mutual trust and confidence and cannot be transferred to the new employer. In other words, the new employer (under Virginia law) will have a difficult time enforcing the non-compete against the employee of the purchased company.