Can My Former Employer Now Customer Block My Employment with Their Customer?

[hardy01]

What is the name of your state (only U.S. law)? ARIZONA

I want to accept a job offer with a customer of the company that pays me. I am not really an employee. I was for years, but two years ago I was laid off. Since then, I have been a sole proprietorship and I have gotten two 1099-MISC forms from my former employer now customer.

They pay me for jobs that I bill them. They also provide supplies, a phone and travel expenses and I have a company credit card. I have never signed a contract with my employer. The relationship has never been formalized. Just handshakes. I just email them spreadsheets showing hours I worked and they send me checks in the amount of my hourly rate times the hours.

The terms and conditions of every contract my former employer has with customers has this passage:
"Commencing immediately, and continuing until a date one (1) year after the date of final completion of the Work, [customer name here] agrees not to directly or indirectly employ, solicit for employment, or advise or recommend to any other person that such other person employ or solicit for employment, any person employed by or under contract to [my former employer name here]."

This job represents a huge opportunity. My my former employer (now my main customer) does not have anything requiring them to give me any work and they how have employees taking over some of the work. But they clearly want me around. Can they block their customer from hiring me?

 

[swalsh411]

Could they force this potential new employer to not hire you? No.

Could the sue you if you violated a non-compete agreement? Yes.

Would they win? Maybe.

 

[las365]

The terms and conditions of every contract my former employer has with customers has this passage:
"Commencing immediately, and continuing until a date one (1) year after the date of final completion of the Work, [customer name here] agrees not to directly or indirectly employ, solicit for employment, or advise or recommend to any other person that such other person employ or solicit for employment, any person employed by or under contract to [my former employer name here]."

So you believe that this clause is in an agreement between the company that offered you the job and the company you used to be an employee of and now do contract work for?

If the former employer sues someone based on this agreement, it would be the new employer, not you. Have you asked the potential employer if they actually have such an agreement with the company you do contract work for? Does the potential employer know that you are arguably "under contract" with that company?

Even without a signed contract,

They pay me for jobs that I bill them. They also provide supplies, a phone and travel expenses and I have a company credit card.

would tend to be pretty strong evidence that you are "under contract" with them.

What is the date of the final completion of the most recent work you did for the potential employer as a contractor for your former employer?

 

[hardy01]

So you believe that this clause is in an agreement between the company that offered you the job and the company you used to be an employee of and now do contract work for?

If the former employer sues someone based on this agreement, it would be the new employer, not you. Have you asked the potential employer if they actually have such an agreement with the company you do contract work for? Does the potential employer know that you are arguably "under contract" with that company?

Even without a signed contract, would tend to be pretty strong evidence that you are "under contract" with them.

What is the date of the final completion of the most recent work you did for the potential employer as a contractor for your former employer?

I will refer to my customer and former employer as my boss, just to have an easy way to refer to him. He is the owner of his company. I've worked for/with him for years.

Yes that clause goes in every contract (I just discovered this when I was lifting boiler plate out to make a contract to use for my customers, lol). So even though I don't have any formal agreement and no assurance my boss will give me work he is trying to block me from being a candidate for positions with any of his customers. (Actually that makes him sound bad, but I think he put that clause in as standard boiler plate when he designed his terms and conditions...it is not directed at me.)

The company that may offer me a job is a big company with lots of resources and is not someone my boss would want to annoy because there is lots of business to be done, potentially. The company interested in me will hire someone no matter what and so losing me to them would not affect my boss any differently than if I went anywhere else. It will not rob him of revenue or anything. My leaving would create the same challenge no matter where I might go.

On your last question, this all just came about in the last few weeks. This is a new customer and they signed the contract and I did some work and am still doing work for them, via my boss.

I hope you can encourage me to believe my boss will not actaully want to make us all fall out. I am the one with the most to lose, perhaps, but it is possible he could lose a lot of business by annoying this company by blocking them from hiring me (can he really do that?). Thanks again and I look forward to your reply.