Unless you take the Thoreau approach, you have probably noticed the United States economy is either in or headed toward a recession.
Amazingly, some folks say this is a great time to start your own business. Now while I fear many will do this because they are being laid off, there are important business decisions to be made, and many legal issues.
QUESTION:
(1) If I am fired, is the non-compete in my contract, still enforceable?
(2) If I take a severance and they offer a non-compete, do I have to sign it?
(3) How can I make sure the employer won't sue if I start my own business?
An employment contract, even a non-compete, is simply a contract. It is binding (usually) if you agreed to it. So we must analyze the above questions in light of Virginia Contract law.
(1) If you are fired, is the non-compete enforceable?
Look at the language in the contract. Many state if employee leaves voluntarily, he agrees to a non-compete. GET YOUR CONTRACT OUT - send it to our office, and we explain what the terms mean under Virginia law.
(2) If you take a severance package and they offer a non compete, do you have to sign? It depends. If the bargain for exchange is - money, in exchange for signing a contract, you may not get the money if you refuse.
(3) How can you make sure your employer won't sue? The only way to do that is to draft and agree to a second contract. You can buy out your non-compete, but unless there is a written agreement that it is no longer valid, your employer has up to 5 years to sue under Virginia law.
As my Mom always said - an ounce of precaution is worth a pound of cure.
Wednesday, November 12, 2008
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4 comments:
I have a question that I am sure if you have come across before but have you ever heard of non compete agreements in the public sector? I have never heard that you cant do it, but at the same time it just doesnt seem right? --enjoy your blog and the material
Thank you for the question and comment.
I know that DOD uses Non-Competes (and that is "public sector.") I would argue that public policy could forbid certain public sector non-competes. For example, teachers, that would be crazy! I don't know of a statute or prohibition on it, but would hope that public policy would prevent some public sector jobs from requiring them.
thanks for the response...thats exactly what I was thinking, I had just hadnt really found anything one way or the other, kind of wonder how much it comes up
I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.
Kaylee
http://www.thinkpadonline.info
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