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Can current employer enforce non-compete if I leave and work for their client.

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carphotographer

Junior Member
What is the name of your state (only U.S. law)? Arkansas.

My question involves labor and employment law for the state of: Arkansas

I'm currently working for a company that provides online merchandising services to car dealerships; I go to different dealerships, take pictures of their cars, and upload them to their website.

One of the dealerships I service has offered me to work for them as their internet marketing coordinator (website, advertising and social media). But part of that job would be taking photos of cars, which is what the company I currently work for does. The dealership had been thinking for some time now to fire the company I work for and do their photos in-house, that's why they reached out to me knowing I would be able to help them.

My problem is, I signed a non-compete agreement with the company I work for now. I've been doing photography even before I worked for this company, and I've only been with them for 3 months if that makes a difference.

These are the statements on the non-compete that concerns me:

"will not provide services, directly or indirectly, to any Conflicting Organization in connection with the marketing, sale, promotion, production, or distribution of any Conflicting Product in any Conflicting Territory. "

"My agreement “not to solicit” means that I will not, either directly or indirectly, during my employment and for a period of one year after the termination of my employment for any reason, initiate any contact or communication with any Restricted Client for the purpose of soliciting, inviting, encouraging, recommending or requesting any Restricted Client to do business with a Conflicting Organization in connection with a Conflicting Product or to otherwise discontinue, in whole or in part, its patronage and business relationship with **company name**."


My question is, if I leave and start working for the Dealership and take photos of cars as part of the job, will the company be able to enforce the non-compete? How about if the dealership discontinues their relationship with the company even before I accept the job?

What do I have to do to be able to accept the job without risking getting sued?

I appreciate any advise or insight anyone can give on this matter.
 


eerelations

Senior Member
Based on what you've posted, the agreement sounds pretty enforceable. It might be different if your current employer let you go and then this client asked you to join them. But since you're already gainfully employed, it's not like you are being prevented from earning a living by this agreement - you are earning a living, albeit not at your employer of choice.

However, the fact that this new job is quite different from your current job - the only similarity being that one of the responsibilities is to take pics of cars - might mean that this non-compete agreement is simply not applicable.

But then again, the agreement maybe prevents you from working for any of your current employer's clients at all, no matter what they do.

Sounds confusing? You bet, and that's why you need to have the contract reviewed in its entirety by an attorney who specializes in employment contract law. (Emphasis on "employment" here.) And if the attorney says the contract is enforceable, the only way you can accept the new job without a risk of getting sued is to get your current employer's permission in writing. (Can't emphasize that in writing bit enough.)
 

LdiJ

Senior Member
Based on what you've posted, the agreement sounds pretty enforceable. It might be different if your current employer let you go and then this client asked you to join them. But since you're already gainfully employed, it's not like you are being prevented from earning a living by this agreement - you are earning a living, albeit not at your employer of choice.

However, the fact that this new job is quite different from your current job - the only similarity being that one of the responsibilities is to take pics of cars - might mean that this non-compete agreement is simply not applicable.

But then again, the agreement maybe prevents you from working for any of your current employer's clients at all, no matter what they do.

Sounds confusing? You bet, and that's why you need to have the contract reviewed in its entirety by an attorney who specializes in employment contract law. (Emphasis on "employment" here.) And if the attorney says the contract is enforceable, the only way you can accept the new job without a risk of getting sued is to get your current employer's permission in writing. (Can't emphasize that in writing bit enough.)
While I wholeheartedly agree...I see one point of "wiggle room". If the dealership intends to take the car photography in house, whether the OP is the one who does it or not, the current employer would have a hard time demonstrating any actual damages...or even potential damages, and damages are the whole purpose of a non-compete...there has to be actual competition. In this particular situation it can be pretty easily demonstrated that there is no actual competition.
 

quincy

Senior Member
On April 2nd, Arkansas expanded the enforceability of noncompete agreements in the State by enacting Act 921. A link to the Act is provided below.

I agree with eerelations that the contract you have with your current employer needs to be reviewed in its entirety by a professional in your area familiar with the new law, to better determine whether you can work for the dealership without risk of violating the noncompete provision in your current employment contract.

Act 921, the Arkansas Act to Provide for the Enforceability of a Covenant Not to Compete Agreement: http://www.arkleg.state.ar.us/assembly/2015/2015R/Acts/Act921.pdf
 

carphotographer

Junior Member
Thank you everyone for responding!

I have consulted my friend's dad who is a lawyer, although he's a Federal Prosecutor and not in Employment law, he was able to help me understand the non-compete agreement that I signed, and he pretty much said the same thing you guys said.

Although he thinks that It may not make financial sense for my current employer to enforce the non-compete when I leave, since the dealership I'm leaving them for is one of the places that generates the least revenue for them (out of the 12 in the territory). They generate only about $400 a month, so It won't be a big loss for them if they lose them as a client, and I don't think they'd want to spend the money on taking legal action to get their $400 a month a back.

However, he told me to err on the side of caution, because there really is no way of knowing what might happen.

What do you guys think?
 

eerelations

Senior Member
We have no way of knowing what might happen either. It really depends on how vindictive your current employer will feel when you leave to work for a client. You certainly know your current employer better than we do. (In fact, we don't know your current employer at all.)
 

quincy

Senior Member
Thank you everyone for responding!

However, he told me to err on the side of caution, because there really is no way of knowing what might happen.

What do you guys think?
First, we all thank you for the thanks. They are appreciated, carphotographer.

If to "err on the side of caution" helps prevent a lawsuit, I think the attorney you spoke to provided you with good advice.

I see that you have three options.

One option is to have your current employment contract reviewed by an employment law attorney in your area, who can better assess where you would stand legally if you chose to leave your current job and take the job with the other dealership. It would require a careful review of the new law and case law in your state, and the facts of both jobs, to determine what the repercussions might be for leaving your current job (to determine the penalties for violating the agreement) and to determine better if your employer actually has good grounds for suing. The personal review would be smart to do if the dealership position is an attractive one, perhaps with better pay or better benefits or better future growth potential than your current one, and you want to take the job.

Another option is to take eerelations' earlier suggestion and approach your current employer to see what s/he says. If your employer does not have a problem with your departure and you taking a position with the dealership, get this in writing. You might want the "in writing" to include a promise from the employer (if this is at all possible) not to sue you over the non-compete.

The final option that I see is for you to stay where you are. This is fine, if you are happy with your current job and the dealership job does not promise you a new direction that you are anxious to explore.

The final decision as to what to do is ultimately up to you. I wish you luck with whatever it is you decide.
 
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