Wednesday, March 02, 2011

This place I am working at maybe for half a year is making me sign a noncompete agreement

And one that seems unreasonable by the way. It is for 5 years and within 15 miles of where I work. I get no benefits from this and of course the way he did it was wrong. He could have said as part of the job you would have sign this which if this was the case I don't know if I would have taken the job. He dated this the first day of the job. When I sign it (if I do) I am going to date it 3/2/2010. Not February 21st.

To make someone sign it without any compensation is wrong.

Furthermore, to have someone work for 6 month and not compete for 5 years I would think is absurd and unreasonable. Going online anything over a year or two was not considered reasonable. On top of this I Have nothing to really share with others that I learned from this guy. that is a threat to him.

The only thing here is giving two weeks notice. Wow! Big deal.

I do have proof that I had work before I took this other job and ended one of my previous jobs only because it may last past April 15th. A proper person gives you the contract on the first day. Not a week and a half into your job with nothing offered for this agreement since we discussed what I would be paid.

I didn't sign it yet and not sure what to do. Certainly it could very much create a problem although I don't know if it is enforceable if I did violate it after this job I ended which I likely would. Only time a problem would exist would be if I took a client from him which to be honest wouldn't be very likely. It is none of his business if I take another job who it is and who I work for. And if my work there doesn't take any of his clients he has no damages so it would be a waste of his time to go after me if he find out who I worked for as I have not learned any deep secrets that hurts his business.

Who said life was easy?

Again it is a five year non-compete within 15 miles of where I work of any financial services which doesn't hit NYC by the way but is only 3 miles from where I live. This for an hourly employee who is not being paid that great. It just seems to me to be just to try to limit my opportunities more then anything else.


SouthernBelle Rivky said...

Do you have a lawyer friend or family member you can show contract to? If you don't, I can ask question for you with a friend of mine. Otherwise a near blanket non compete is likely not going to be enforceable although if you do sign it could make your life very difficult. A former employer cannot restrict your right to work in your profession in your general area to the point you cannot reasonably find job for years. Financial services means you can't work in any bank or brokerage, maybe insurance too. Uh..that's like 1/3 of the professional jobs around here even excluding NYC, isn't it? They aren't allowed to make you homeless. Unless very narrow to prevent you from becoming or aiding a competitor taking customers across the street or duplicating a very novel concept like exclusively doing taxes to midgets and people with wooden legs, it would likely be considered invalid I think.

You could also argue that you were under duress when signing because they waited until after you started employment and had you refused to sign it, you would have lost income for rest of tax season. Argue they prevented you from getting hired elsewhere during start of peak season when you accepted work weeks prior. Not sure if that would work because employers can change employment terms at will in a non union environment, just like you could quit at will as well. But still even if it is not likely enforceable, they can waste your time and run up a legal bill into the thousands if you were sued. And you would worry and stress about 'what if' in the future. So if I were you I would refuse to sign it and say it isn't reasonable.

BTW this noncompete you are describing is more severe than if you were owner of a Blockhead franchise location. If I'm recalling correctly and unless it's changed since I read it a few years ago which is possible, their restriction is barring soliciting their customers for 2 years only for tax related services. As long as you don't directly solicit their customers for taxes, customers have right to go anywhere, but you can't entice or steal them. So food for thought your employer is trying to be way more strict than the largest tax preparer.

Analytical Adam said...

Thanks for sharing the info on one of tax services which to be fair is reasonable as companies are concerned of people working for them and stealing their clients and that is something enforceable.

If I did sign it I AM GOING TO DATE IT March 3rd which you ARE SUPPOSE TO GET CONSIDERATION for this which you can tell a person before you hire them that is a condition of employment but not in the middle of employment with no additional consideration. Since I signed this a week after and I have my deposits of my checks from this company and others that could be a problem. It is a case of he said-he said.

Furthermore, it is none of their business who I work for unless I directly take one of their clients which I don't think is very likely in another job. This guy has no way of knowing where I am working for and has no right to that info.

I am not sure it would even be worth his time to sue me unless I took one of his clients but that is the only thing.

You can defend yourself in these cases and I have quite a number of defenses.

1. It is unreasonable and prevents from making a living in terms of type of work and duration. Anything over 2 years is considered unreasonable.

2. It was offered while I started working and not as part of the employment package and by dating the contract clearly why would I sign this 10 days after starting employment and I have my bank statements to back this up. I save all my bank statements to PDF's.

3. A franchise tax service only limits time to two years, specific to tax service, and only in terms of solicitating their clients not ANY CLIENT in the area. Correct me if I am wrong SouthernBelle.

I read someone on the internet who says companies make him sign noncompete and when he leaves he tells him to go for it and they don't bother.

The only thing is in this kind of business there is a DOWN TIME and who knows maybe they go after people during their down time.

Not sure what they can do especially if my work doesn't damage this person in any way.

I'm not sure what harm it really can do. The only harm is there may be two firms nearby I likely can't work for or may be a risk to work for. Other then that there is no way he can prove that I have damaged him in any way and thankfully this is one area where some VAGUE form of emotional distress is not considered.

Anything to add or subtract from what I said and I am correct about point 3 that I wrote here.

Thanks for your input SouthernBelle Rivky.

Analytical Adam said...

Anyway not sure what I should do? Should I at least try to make it less harsh or should I just sign it since if someone is going to make such a harsh agreement better to just sign it knowing it isn't enforceable anyway.

The thing bothers me is that the guy is a little out of touch although to be fair on one other element of this most of his clients are local and generally they don't mail tax returns as they have the clients pick the tax returns up as one of the people there told me as they don't like mailing returns.

SouthernBelle Rivky said...

Yes the non compete is limited to soliciting specifically their clients base and only for tax preparation and light bookkeeping. Year round locations offer very light bookkeeping services so that is restricted as well. Probably specialized type bookkeeping services would be exempt, as would say defending a return since that is outside the scope of a franchise services. I'm just thinking aloud on the last one. I would think would only apply to recent customers not someone that is in the database because they came in once 10 years ago.

The franchise non compete also has another vested issue that isn't a factor with your situation. They do lots of training in the summer and fall, kind of like a basic college class followed by lots of optional advanced training to boost commission rate. That is fair they don't want to train someone to be their competitor. Supposedly this has been a past problem.

In your case, you walked in fully qualified to offer services that you could legitimately do on your own. You own your skillset, it wasn't created or enhanced by your current employer like franchise training new people. Before you worked at this employer, nothing prevented you from opening your own firm right across the street doing exactly what you doing now.

I bet you are curious on how I know this about such franchises. A bunch of smart but out of work people looked into a number of franchises a while back where I'm from. I wasn't going to be more than a nearly silent investor since I was doing the NY thing and busy with my own work. I would say it is a good business model in many aspects. Except the pay structure for employees (not owners of course) is commission based. Absolutely horrible to the point I think it is almost a bit evil.

SouthernBelle Rivky said...

Well you asked me what would I do. Some thoughts that come to mind. One is that the non-compete is probably some generic thing he found off internet. Seriously, 'financial services' is so vague. Is he really wanting to prevent former employees from working or is more interesting in protecting his livelihood?

I'm guessing boss is small business owner, his big concern is that you don't steal his customers or go give someone else a competitive advantage that you current give him. Perhaps this is what happened before and now he is trying to be extra careful but is now annoying you.

Maybe after a week he realizes you are such hot stuff he doesn't want you going to the two competitors or opening your own shop and being his third competitor. Besides, you don't know if you'd want to work for the 2 competitors or if they would hire you, maybe everyone is family member there or they are bit evil on the pay as I called it earlier. If you told me 50 competitors were in your area, I would be concerned, but not over 2.

I would like to think unless he felt you were taking away his business, he isn't going to waste time sueing you. What would he win if all you are doing is getting a paycheck and he has no tangible loss?

So I guess sign since for practically purposes, enforcement is limited unless you do really bad which he should sue you then but you aren't like that. If you feel the wording is too vague, maybe you can for specific terms changed to what you feel is reasonable. Or point blank ask if his concern is your working at those 2 places specifically or starting your own and have the wording reflect the specific concerns.

Analytical Adam said...

Well I did sign it and date it which that in itself is a problem as I dated it 3/3/2011 and of course the contract the date is 2/21/2011 and of course the question will be why was there a two week delay in signing.

There is a lawyer in this office so he may know a little more but still I don't see how it could be enforced just with the dating alone as I received no consideration for this which consideration is part of what needs to be given for this or else it is a one sided contract under duress which I do need this job at the moment.