NEGOTIATE.... OR NOT?

So you are approached after years of employment, and asked to sign an employment contract that contains language on future employment. After being a good solid employee, now everyone is being asked to sign this document.

Questions you are probably considering?

(1) Why now? What if I don't sign it?
(2) What if others refuse to sign it?
(3) Can I negotiate the terms of the agreement?
(4) What if they fire me - does the agreement still apply?
(5) Do I get anything extra for signing this agreement? A Bonus, anything?

In a scary economy, it is important to know what you are signing... or being asked to sign.

According to Virginia law, you can be fired for refusing to sign an employee contract. It is a "right to work" state which basically means you can be fired for any reason, other than race, age, gender or religion.

Now, if other employees refuse to sign and nothing is done - that is good news. That makes it difficult for the employer to later state, they are damaged by a breach --- if other employees left and competed, and they did not enforce, or those other employees didn't have non-competes, the Court is less likely to rule against the lone employee that signed the agreement.

Is the non-compete valid if you are fired? Yes - unless it states otherwise, when employment is terminated - the agreement stays in effect.

Can you negotiate? The answer is - maybe. Depends on the company. A Local hospital in our home town refuses to change terms of employment agreements with new physicians, but a smaller company with less employees may be willing to negotiate the terms of your contract.

If you have questions or concerns, please call us before you sign... Better be safe than sorry.

EARLY RETIREMENT AND NON-COMPETES

Even with our sagging economy, some folks are considering early retirement. Some are offered "early retirement packages" by their corporate employers as a way for the corporation to reduce its payroll and become leaner and meaner in these tough economic times.

Early retirement may be just what the doctor ordered for you. However, there are many issues to consider such as how will you pay for health insurance?...how long will you live and how will you pay your living expenses?...and will you work part-time, as long as your health permits, to help pay for future costs and expenses?

Some employees may face restrictions on new employment if the employer asks them to sign a non-compete or non-solicitation agreement. The restrictions can make it difficult for an employee to work at a similar job. Non-compete agreements limit work for competitors and non-solicitation agreements prevent an employee from contacting clients of their former employer.

Consult with an attorney if you are considering early retirement and are presented by a retirement package which contains a non-compete or non-solicitation provision. You will be glad you did!

EMPLOYEE VICTORY IN VIRGINIA NON-COMPETE CASE

Our Fourth of July was made much brighter with a big non-compete win for a client.

Our client, a successful recruiter (think head-hunter) in SW Virginia, had been sued last spring, for over $300,000 by her prior employer.

It was alleged that she breached her contract when she started her own recruiting business within a 50 mile radius of her old office (MRI of New River Valley). In addition, it was alleged she misappropriated proprietary information, trade secrets, etc.

As the contract required arbitration, the case was arbitrated instead of being filed in a local Circuit Court. The case was decided by a Virginia Arbitrator - and our client won!

The contract was held to be unreasonable restriction on her right to make a living (the litmus test under Virginia law) as well as being more over broad than necessary to protect the employer's legitimate business interest. In addition, the arbitrator held that two separately numbered provisions could not be severed, but must be read together as they served in concert to restrict employment. Lastly, the Arbitrator held the plaintiff Franchise owner, failed to prove specific financial loss as a result of her alleged breach.

Every case is different and unique but the ruling is great news for Employees in the recruiting industry, as well as Virginia residents.

Stay tuned as we share more about the case facts, and ruling.

HOW MUCH DOES IT COST?

One of our readers, Paula, asked in response to one of our recent posts, "I'm curious about how much you charge to review non-compete agreements." Great question and here is my answer.

First, my law firm will only represent employees in disputes over noncompete and nonsolicitation agreements. Clients come to us in one of two situations: First, the client calls or emails and tells us they are thinking about leaving their current employer and going to work for a competitor. They previously signed a noncompete agreement and want to know how Virginia law would apply to their agreement and an assessment of their chances of successfully beating their noncompete. The second type of client calls to tell us he/she has already left their previous employer, is now working for a competign business, and has been sued by their previous employer to enforce the noncompete and recover damages.

We represent both types of clients based upon a rate of $175 to $200 per hour. The rate depends on the complexity of the case. For the first type of clients, we can usually provide an analysis of their situation with 3 to 5 hours of work. For the second type of client, it is impossible to estimate the total time and legal fees which will be required as the litigation is driven by the previous employer and can be both lengthy and expensive.

VIRGINIA COURT RULES AGAINST NONCOMPETE

Good news to report! The Chesterfield Circuit Court (just outside of Richmond) as ruled in favor of an employee and against the employer in a noncompete case. The case is Knowles v. New Age Digital, Inc.

The court denied New Age Digital’s attempt to enforce a noncompete that prohibits any company director from “any type of competitive activity” anywhere within the Commonwealth of Virginia for one year after termination. Even better, the court also found unenforceable a nonsolicitation clause that prohibited any director, for two years after departure, from soliciting any New Age employees for employment by the director or any competitive entity, or soliciting any entity for whom New Age proposed services for three years prior to the director’s departure.

This is a great decision for employees in Virginia!