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Thread: Non Compete agreement/ loyalty agreements

  1. #1
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    Default Non Compete agreement/ loyalty agreements

    Hi all,
    I recently got laid off in February. My employers sent me a separation package, I did not get a lot of time to read all the details as they gave 4 days, which included the weekend, to sign this document. A copy of the agreement was never given to me as well. Recently, I requested for a copy of the separation document and read it thoroughly. I discovered that I am to abide to a non complete agreement, which I signed when I started with the company. The non complete agreement is for 3 years from they day I got laid off.
    Unfortunately, I signed this agreement without consulting a lawyer because I was in no position to do so.

    I have not found a job, the overall job market is thin and people are still getting laid off, I may be wrong. I am now looking at starting my own company as I am not finding any success in the job market.

    My former employer is a 20 billion dollar company. I was with the company for almost 2 years and for severance got 3 weeks pay and was entitle to the 2014 annual bonus performance pay. The agreement now seems very one sided.

    The question I have for anyone who may know about non compete and loyalty agreements is, if I start my own company and compete with my former employer in the same industry and they decide to sue me, will the non compete clause be upheld in a court of law or will the courts deem this an unreasonable agreement due to circumstantial situation?


    Thanks for reading

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    Default Re: Non Compete agreement/ loyalty agreements

    Originally posted by outrageousrich
    Hi all,
    I recently got laid off in February. My employers sent me a separation package, I did not get a lot of time to read all the details as they gave 4 days, which included the weekend, to sign this document. A copy of the agreement was never given to me as well. Recently, I requested for a copy of the separation document and read it thoroughly. I discovered that I am to abide to a non complete agreement, which I signed when I started with the company. The non complete agreement is for 3 years from they day I got laid off.
    Unfortunately, I signed this agreement without consulting a lawyer because I was in no position to do so.

    I have not found a job, the overall job market is thin and people are still getting laid off, I may be wrong. I am now looking at starting my own company as I am not finding any success in the job market.

    My former employer is a 20 billion dollar company. I was with the company for almost 2 years and for severance got 3 weeks pay and was entitle to the 2014 annual bonus performance pay. The agreement now seems very one sided.

    The question I have for anyone who may know about non compete and loyalty agreements is, if I start my own company and compete with my former employer in the same industry and they decide to sue me, will the non compete clause be upheld in a court of law or will the courts deem this an unreasonable agreement due to circumstantial situation?


    Thanks for reading
    On the plus side, your inability to read or use reason will inhibit your ability to run a company, so the non-compete will likely be pointless.

    I think you should spend lots of money on a lawyer to fight this "20 billion dollar company", I'm sure their lawyers are shit.

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    ^ no need to be a dick about it man.

    But back to the OP, I have heard these types of non compete agreements don't hold up in court. I would definitely talk to a lawyer about it

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    I've heard the same thing, the courts apparently don't like these.
    See Crank. See Crank Walk. Walk Crank Walk.

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    It depends greatly on the specifics but 3 years is a long one. Just because the 3 years doesn't hold up in court doesn't mean 6 months wouldn't.

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    Just because a company has you sign a "document" does not mean it stands up to a court of law. They can write anything they wish, you can sign it but if it is not up to the laws of court, it is toilet paper. You'd best get a lawyer to look at it now though. We've all signed marginal papers for employment, we wanted the job and did not want to make waves.
    Last edited by CanmoreOrLess; 05-13-2015 at 07:18 PM.

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    The enforceability of a non-compete will depend on a number of factors. You should review it with a lawyer to determine whether it will hold up. The details you've provided are insufficient to make any conclusions.
    Original Post NAZI Moderated


    Originally posted by r3cc0s
    Felon or Mistermeiner

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    It will depend on a few things but one thing taken seriously into consideration for niche or specialized roles is that whether or not there are other industries or ways to make living with your expertise. If your training, education and expertise only allows you to work in a job role that would compete with the past employer the non-compete will not hold up.

    Chat with a lawyer about your situation. You really need to read stuff you sign. You were likely in shock but 4 days to read a document is sufficient. Never sign anything until you have read it thoroughly...mortgage, insurance, employment contract, etc. Maybe it's the business mind in me but don't know how anyone thinks different.

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    I refused an employment offer from a company because of their non-compete clause they wanted me to sign as well as rules against trading certain stocks. Some of which, I already owned.
    Gotta read man!

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    3 years is really, really long. We do 1 year non-compete clauses for our sales guys only. And they specify 1 year with one of our existing clients. Basically, they can't poach a client from us when they leave. But, if the said client was unhappy or wanted to choose a different vendor and looked our previous sales guy up then the clause does not apply. Client initiated, no violation.

    We have had a couple suspected violations but in most cases the client says "nope, we sought them out. Great guy and we were investigating competing services/prices at that time." No lawsuit. Twice I can think of did my company pursue the non-compete and in both cases the former employee emailed our clients when they caught wind of the termination. So we had a record. Basically "Hey client I am getting sacked soon, call me". That's the only time we followed through. The only case that's slam dunk.

    Depending on the size of the company and the industry a 3 year non-compete could render you unable to find employment. Which your former employer cannot do. Courts hate that shit.

    From what I understand if the client approaches you, the clause does not apply. Your employer cannot dictate who another company hires. If you go out and seek out the client and steal them then maybe there could be a violation. But its damn near impossible to prove.

    Had a dentist I really liked. He moved to another practice. Had a non-compete. I called the new place after googling him and finding out where he went. They acted awkward on the phone and said the dentist would call me back. He wanted to know how I knew to call the new place. I said I googled it. He said "well, if you are unhappy with your current dental office we are accepting new clients." Carefully worded to put the decision in my hands not his. Then it was ok if I left the current place.

    Really, following up on a non-compete is risky. And the violation has to be damn obvious.

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    No offence but, 4 days is long enough to read anything if it's important to you.....
    Originally posted by SJW
    Once again another useless post by JRSCOOLDUDE.
    Originally posted by snowcat
    Don't let the e-thugs and faggots get to you when they quote your posts and write stupid shit.
    Originally posted by JRSC00LUDE
    I say stupid shit all the time.
    ^^ Fact Checked

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    Does the non compete specify the conditions in which it applies? If they laid you off most of the ones I've seen before do not apply. They are typically meant to prevent you from leaving for a competitor or be poached. That being said they rarely hold up in court as they cannot prevent you from making a living.

    That being said a lawyer may be your best bet as the wording of every agreement is different

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    From my very limited understanding they are required to give 3 weeks for signing. That may work in your favor. Also non competes don't tend to hold up when it comes to your lively hood.

    My experience is very limited.

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    Thanks for the response everyone!
    I signed the agreement because I felt I had no other options. I guess I may have hit the panic button as I was afraid they would take away my 2014 performance bonus if I did not sign and assumed tough times ahead. My manager was suppose to UPS the agreement a week and a half prior to me actually receiving the document, when I finally questioned HR why it was taking as long as it did the HR rep finally got it sent out leaving me with only 4 days to review.

    I've never been laid off and didnt know what to expect or do.

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    Non competes are pretty tough to enforce in Alberta (from experience), and that's for employees leaving to join a competitor, the worst case possible. All it really does is tie you and your new employer up with time and lawyers if your ex employer wants to be a dick about it. When new employers are dragged through the legal process because of a hire, they usually just say fuck it and not hire you. Pure bullying.

    Since you've been laid off, the chances of a non compete being enforced is zero. Really bizarre they made you sign such an aggressive 3 year non compete. They pretty much want you to not work for them nor anyone else for 3 years without compensation. The courts would laugh at them if it ever made it that far. Most non competes signed during employment contract gets nullified when you get terminated, as the employment agreement is effectively ended. So it's really odd that you had to sign one to take on a really shitty package. If they paid you out for 3 years, then maybe the courts might look at it.

    Honestly I wouldn't worry about it.
    Originally posted by SEANBANERJEE
    I have gone above and beyond what I should rightfully have to do to protect my good name

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    Originally posted by outrageousrich
    Thanks for the response everyone!
    I signed the agreement because I felt I had no other options. I guess I may have hit the panic button as I was afraid they would take away my 2014 performance bonus if I did not sign and assumed tough times ahead. My manager was suppose to UPS the agreement a week and a half prior to me actually receiving the document, when I finally questioned HR why it was taking as long as it did the HR rep finally got it sent out leaving me with only 4 days to review.

    I've never been laid off and didnt know what to expect or do.
    Yeah, you learned a tough lesson this time. I was talking to an employment lawyer I know about similar situations. A lawyer can get you the money they were promising you if you don't get back to them in the 4 days. What they offered you (including the bonus) was their starting offer, you could have worked up from there. I would still go speak to a lawyer about the Non-compete clause.

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    With non-competes I was under the impression it was all about initial approach. A non-compete could not, in any way, dictate who another company wanted to hire. There is a difference between a competitor choosing you and you stealing them. Hard to prove, hard to litigate. That's how I understand it anyways. Would love to be corrected if warranted.

    The verbiage in non-disclosures are similar to IP related agreements. Intellectual property agreements are very enforceable. IP is something you don't fuck around with. From what I have seen if IP is hard to define or vague a company can throw a non-compete at you as its definitions are looser. Not that they would win, but the document looks scary and is really designed to enforce IP when the employer doesn't have a firm grasp on it to claim definitive ownership to the point that an actual IP agreement would stick.

    It all depends on what you did and what you know and what industry you are in.

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    The info I was given by my lawyer (in layman's terms) was essentially that if the employer gets rid of the employee by firing or layoff, the non-compete goes out the window.
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    I've worked with a few people who recentlyleft their jobs to start their own servicing business in the O&G industry. Since the industry is relatively small, they were really worried about the Non-Compete they signed and who they can provide service for. They consulted a few lawyers and I had a chance to sit on a couple of those meetings.

    Long story short, the consensus is that Non-Compete is generally very difficult to enforce in Alberta. They said the companies usually will make some noise out of it if you are clearly poaching (i.e. securing work for your new company from clients while you are still employed by the old company), but otherwise they know it would be a tough enforce. From what you've described, I don't think you have anything to worry about.

    Disclaimer, this is just what I heard in some of those meetings so don't quote me on it.

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    I may be wrong, but I thought non-competes needed to be executed to be valid. IIRC, simply signing them does not make them valid.
    Last edited by Env-Consultant; 05-14-2015 at 11:25 PM.

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