Can I make the switch with this Non-Compete/NDA?

[SaltireVA]

What is the name of your state? Virginia

Upon being hired by my current XYZ employer I signed a non-compete/NDA. I've been with XYZ company for a good while now and have hit my max of learning new things now. There's much more details but I won't waste everyone's time.

A customer of XYZ company put out a job listing to the public and I applied and was ultimately offered a job. New title, pay raise, etc...

My current employer then basically threatened me with saying if I left and took the job they reserve the right to take legal action as necessary etc etc. They state two lines per the non-compete/NDA listed below.

During Employee’s employment and for a period of one year following Employee’s termination or separation from the Company for any reason, Employee will not, for the purpose of doing competitive business, directly or indirectly, through any person or entity, communicate with (i) any of the Company’s customers known to Employee during his employment with Company and from which the Company generated revenue during the one year preceding Employee’s termination or separation;

During Employee’s employment by the Company and for a period of one year following Employee’s termination or separation (for any reason), Employee will, before accepting an offer of employment from any person or entity, provide such person or entity a copy of this Agreement. Employee authorized the Company to provide a copy of this agreement to any and all future employers of employee.

Also in my non-compete/NDA it states they follow Texas law just FYI.

I look forward to any input anyone may offer, thank you!

 

[Zigner]

Your request is beyond the scope of an internet forum. You will want to take your documentation to a local employment attorney for review. Best of luck to you.

 

[cbg]

While I agree with Zigner that this is beyond the scope of an internet forum, I am curious as to why you believe you should not have to abide by what you agreed to and signed off on?

 

[SaltireVA]

While I agree with Zigner that this is beyond the scope of an internet forum, I am curious as to why you believe you should not have to abide by what you agreed to and signed off on?

Because I have sought out legal advice and basically they've said the customer is not a competitor to my employer and that they're basically saying this stuff to me as a scare tactic. Regarding the revenue side of it whether I take the position or somebody else does it's going to get filled so that aspect is out the window.

 

[eerelations]

Whether or not the agreement is enforceable, your current employer is legally within its rights to show the agreement to your new employer. The new employer may then withdraw its offer to you. (As in "Don't know if that thing is enforceable or not, but hey! we sure don't wanna go through the hassle of trying to prove it one way or another.") And that would be legal too.

 

[Zigner]

Because I have sought out legal advice and basically they've said the customer is not a competitor to my employer and that they're basically saying this stuff to me as a scare tactic. Regarding the revenue side of it whether I take the position or somebody else does it's going to get filled so that aspect is out the window.

Who is the "they" that told you this?

 

[eerelations]

Because I have sought out legal advice and basically they've said the customer is not a competitor to my employer and that they're basically saying this stuff to me as a scare tactic. Regarding the revenue side of it whether I take the position or somebody else does it's going to get filled so that aspect is out the window.

So you paid an attorney to review your agreement, and your attorney gave you his/her legal opinion of the agreement, and yet you still felt compelled to come here to ask the same question you asked your attorney. Why is that?

 

[quincy]

Here is a link to the Virginia Supreme Court ruling in Home Paramount Pest Control Companies, Inc. v. Shaffer, which analyzes the elements of noncompete agreements and the enforceability of these agreements:

https://cases.justia.com/virginia/supreme-court/101837.pdf?ts=1396151520

 

[Mass_Shyster]

Did you know your potential employer was a customer of XYZ Corp.? Has potential employer done business with XYZ Corp in the last year?

If the answer to these questions is "Yes", taking a position with them may constitute a breach of contract.

HOWEVER, there is nothing illegal or immoral with breaching a contract, and most contracts include what happens if one party breaches. If you intend to breach, you need to decide the possible downside. "legal action as necessary" is pretty vague.

Remedies for a breach of contract vary. They could get an injunction enjoining you from working for said company for some period of time. They could also sue you for damages (lost profits) that your breach cost them.

Also, enforcing a non-compete is an expensive proposition. I know of one company who sued a former employee for breaching a non-compete. Employer spend close to $100K in legal fees, and former employee was ordered by the court not to work for new employer. New employer picked up former employees legal fees.

The big question is how will former employer determine where you are working once you leave their employ? Will they hire detectives to follow you to work? In the case I mentioned, the employee was a salesman and was calling on former employer's customers.

 

[quincy]

Did you know your potential employer was a customer of XYZ Corp.? Has potential employer done business with XYZ Corp in the last year?

If the answer to these questions is "Yes", taking a position with them may constitute a breach of contract.

HOWEVER, there is nothing illegal or immoral with breaching a contract, and most contracts include what happens if one party breaches. If you intend to breach, you need to decide the possible downside. "legal action as necessary" is pretty vague.

Remedies for a breach of contract vary. They could get an injunction enjoining you from working for said company for some period of time. They could also sue you for damages (lost profits) that your breach cost them.

Also, enforcing a non-compete is an expensive proposition. I know of one company who sued a former employee for breaching a non-compete. Employer spend close to $100K in legal fees, and former employee was ordered by the court not to work for new employer. New employer picked up former employees legal fees.

The big question is how will former employer determine where you are working once you leave their employ? Will they hire detectives to follow you to work? In the case I mentioned, the employee was a salesman and was calling on former employer's customers.

The "one year" restriction is unlikely to be enforceable.

 

[cbg]

Although I believe that in general my state, which is not the OP's, generally limits non-competes to 6 months (MAShyster can confirm or correct), it will allow NDA's for much longer. And I know of one case, in which I was marginally involved, where the two companies were ordered by the court not to hire any of each other's employees for a period of 18 months. Circumstances matter.

 

[quincy]

Although I believe that in general my state, which is not the OP's, generally limits non-competes to 6 months (MAShyster can confirm or correct), it will allow NDA's for much longer. And I know of one case, in which I was marginally involved, where the two companies were ordered by the court not to hire any of each other's employees for a period of 18 months. Circumstances matter.

Virginia is apparently one of the states where a noncompete's provisions must be all enforceable (as to function/business interest, time and geographic scope) or the noncompete will as s rule not be enforceable at all. Virginia courts do not as a rule "blue pencil" any unenforceable portions and enforce the rest.

In other words, if the business interest is legitimate and the geographic scope is not unreasonable but the time to which a former employee is bound by the noncompete is excessive, a Virginia court is likely to find the entire noncompete unenforceable.

The provisions of a nondisclosure agreement (NDA), on the other hand, will depend on the trade secret and can have a lifetime restriction on disclosure and be enforceable.

But, yes, circumstances definitely matter.