Non-compete for Remote Workers

[Drifter9876]

What is the name of your state? NJ/CT

I've been offered a position at a startup company based in CT. Although the company has physical headquarters in CT, most of the employees are remote. The offer letter states that my position is "fully remote". I am currently based in NJ and thinking of relocating to another state like CA/ND/OK/DC. Mainly because I want lower property tax and also the benefit of having protection from non-compete clauses for any future employers. I'll probably stay at the new company for at least 3-4 years before looking again. Having a non-compete over my head really makes it hard to recruit for higher level jobs. Its my understanding that noncompete agreements are not valid in CA/ND/OK/DC.

The job is fully remote meaning that I will be working from home via Zoom and teleconferences. I will provide my input into company decisions and execution. I might be required to travel to the company headquarters several times per year. The company does not have a presence outside of CT.

Details of the agreement: (I can't copy the entire thing here for privacy reasons. But here are the key portions)

Non-Competition; Non-Solicitation.
(a) Non-Compete. Executive hereby covenants and agrees that during the Employment Term and for a period of one (1) year following the termination of Executive’s employment, regardless of the reason for such termination, Executive will not, without the prior written consent of the Company, directly or indirectly, on Executive’s own behalf or in the service or on behalf of others, whether or not for compensation, engage in any business activity, or have any interest in any person, firm, corporation or business, through a subsidiary or parent entity or other entity (whether as a shareholder, agent, joint venturer, security holder, trustee, partner, Executive, creditor lending credit or money for the purpose of establishing or operating any such business, partner or otherwise) with any Competing Business in the Covered Area. For the purpose of this Section 13(a), “Competing Business” means any business competing with any products and/or services of the Company or its affiliates that exist or are in the process of being actively developed or acquired as of or within the six month period prior to the effective date of Executive’s termination. For the purpose of this Section 13(a), “Covered Area” means all geographical areas of the United States and other foreign jurisdictions where the Company has offices and/or sells its products directly or indirectly through distributors and/or other sales agents. Notwithstanding the foregoing, Executive may own shares of companies whose securities are publicly traded, so long as ownership of such securities do not constitute more than one percent (1%) of the outstanding securities of any such company.
(b) Non-Solicitation. Executive further agrees that during the Employment Term and for a period of one (1) year following the termination of Executive’s employment, regardless of the reason for such termination, Executive will not divert any business of the Company and/or its affiliates or any customers or suppliers of the Company and/or the Company’s and/or its affiliates’ business to any other person, entity or competitor, or induce or attempt to induce, directly or indirectly, any person to leave his or her employment with the Company and/or its affiliates; provided, however, that the foregoing provisions shall not apply to a general advertisement or solicitation program that is not specifically targeted at such employees.
(c) Injunctive Relief; Modification. Executive acknowledges and agrees that Executive’s obligations provided herein are necessary and reasonable in order to protect the Company and its affiliates and their respective business and the Executive expressly agrees that monetary damages would be inadequate to compensate the Company and/or its affiliates for any breach by the Executive of Executive’s covenants and agreements set forth herein. Accordingly, Executive agrees and acknowledges that any such violation or threatened violation of Section 12 or 13 will cause irreparable injury to the Company and that, in addition to any other remedies that may be available, in law, in equity or otherwise, the Company and its affiliates shall be entitled to obtain injunctive relief against the threatened breach or the continuation of any such breach by the Executive of Section 12 or 13 without the necessity of proving actual damages. If, at the time of enforcement of Sections 12 or 13, a court shall hold that the duration, scope or area restrictions stated therein are unreasonable under circumstances then existing, the parties agree that the maximum duration, scope or area reasonable under such circumstances shall be substituted for the stated duration, scope or area and that the court shall be allowed to revise the restrictions contained therein to cover the maximum period, scope and area permitted by law.
14. Miscellaneous Provisions.
(a) Modifications; No Waiver. No provision of this Agreement may be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by Executive and by an authorized officer of the Company (other than Executive). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.
(b) Entire Agreement. This Agreement supersedes all prior agreements and understandings between the parties, oral or written, including, without limitation, that certain letter agreement from the Company to Executive regarding the Company’s offer of employment. No modification, termination or attempted waiver shall be valid unless in writing, signed by the party against whom such modification, termination or waiver is sought to be enforced.
(c) Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the internal substantive laws, but not the conflicts of law rules, of the State of Connecticut.

Questions:
1) If I accept this agreement (currently based in NJ) and then relocate to a state like CA/ND/OK/DC in the future, will the non-compete clause be enforceable?
2) Do I physically have to be a resident of a noncompete state (CA/ND/OK/DC) before signing the employment agreement?
3) Should I ask for changes in the Choice of Law clause?

 

[Zigner]

What is the name of your state? NJ/CT

I've been offered a position at a startup company based in CT. Although the company has physical headquarters in CT, most of the employees are remote. The offer letter states that my position is "fully remote". I am currently based in NJ and thinking of relocating to another state like CA/ND/OK/DC. Mainly because I want lower property tax and also the benefit of having protection from non-compete clauses for any future employers. I'll probably stay at the new company for at least 3-4 years before looking again. Having a non-compete over my head really makes it hard to recruit for higher level jobs. Its my understanding that noncompete agreements are not valid in CA/ND/OK/DC.

The job is fully remote meaning that I will be working from home via Zoom and teleconferences. I will provide my input into company decisions and execution. I might be required to travel to the company headquarters several times per year. The company does not have a presence outside of CT.

Details of the agreement: (I can't copy the entire thing here for privacy reasons. But here are the key portions)



Questions:
1) If I accept this agreement (currently based in NJ) and then relocate to a state like CA/ND/OK/DC in the future, will the non-compete clause be enforceable?
2) Do I physically have to be a resident of a noncompete state (CA/ND/OK/DC) before signing the employment agreement?
3) Should I ask for changes in the Choice of Law clause?

Your questions are beyond the scope of this (or any) internet forum. You would be wise to speak to a local employment law professional.

 

[cbg]

I will say, though, that if you are working for company XYZ and living in NJ, and later, continuing to work for company XYZ but relocate to OK (or whatever) that would not trigger a non-compete issue.

 

[zddoodah]

I am currently based in NJ and thinking of relocating to another state like CA/ND/OK/DC. Mainly because I want lower property tax

If you want lower property tax, CA would be a horrible idea.

Its my understanding that noncompete agreements are not valid in CA

Generally correct.

The company does not have a presence outside of CT.

You mean other than by virtue of many/most/all of its employees being outside CT.

Do I physically have to be a resident of a noncompete state (CA/ND/OK/DC) before signing the employment agreement?

No.

Your first question (and the extensive contract review that would be required to answer it) (a) is beyond the scope of what you can reasonably expect from an online forum like this, and (b) is a request for specific legal advice. Your third question seeks opinions that don't matter because the prospective employer almost certainly will say no.

 

[adjusterjack]

Details of the agreement: (I can't copy the entire thing here for privacy reasons. But here are the key portions)

My own experience with a non-compete (when I was young and stupid) is that if you are required to sign one to get the job, don't take the job. A con-compete agreement will eff you up royally.