Do I need to Sign a Non-Compete agreement?

Question

I have worked for a company for about 10 years now. I started working there since I was 18. Through the years I have worked my way up the ranks. Recenlty two key employees were let go due to down sizing. Those two employees started their own business and started competing againt our company. Now, they want me to sign a non-compete agreement. I do not want to sign because If I ever let go I would want to do this type of work. I am very familiar with the industry and I know I would do quite well. Do I have to sign? If I do not sign, what will happen? Will I get fired?

I live in California. This Non Compete agreement is new to the company.

Answer 1

Ironic isn't it? They let two people go to save money and they created a competitor.They should have kept them and figured out how to increase revenue. If these other people created a company obviously the business is out there so they should have figured out how to go after that before laying people off.

I would speak to an attorney. Just sitting down and reveiwing the noncompete should not cost much. Could be that since this was not a condition of employment when you were hired that they can't require one now. But sometimes they can require one once you reach a certain level as you have more access to company business practices.

Say it turns out you don't have to and you don't sign. Yes they can fire you. Or not be promoted further but they have already layed off people anyway so where would you get promoted to? Or if they lay people off again you could be next.

Say you sign and get layed off anyway. Then you have to wait 5 years to start a business. Say you stay and are later ready to leave and start your own...... now you still have to wait 5 years. So either way you lose.... sign or not. So it sounds like it would be best to leave now if it comes down to it. Some noncompetes state that you can not even WORK for another company in the area. What then.

The company maybe needs to consider a few things. They are sending the wrong message w. the noncompete. Basically we are not a strong company and can compete against any other company. Then there is the employee perception of how strong is the company that they are working for if another company can be formed and be in business? Is managment so worried?

If they start losing people over this how much is it going to cost to replace them. You have to hire, train and get people up to speed. Could you really replace people like you who have been there 10 years? They already layed off two key people so there has to be others who are looking around for other jobs. And if a few more leave then everybody starts to look around. Where is their business then? They need to drop the noncompete thing and show confidence. If you are senior enough you might attack it from that angle.

Answer 2

You need to check with an attorney in California before making any decision.

The big issue which I do not know is whether California is an at-will state. In an at-will state, an employer can fire you for any reason at any time unless you fall into a protected category (age, race, gender, whistle-blower, etc.).

Another big issue is the actual terms of the non-compete agreement. As noted in other answers, courts tend to look very closely at non-compete agreements as being against public policy. They will only enforce those agreements if they are reasonable in terms of the restriction (which is based on a weighing of the true business need against the public policy on not restricting your right to work and earn a living).

I would suggest taking a copy of the agreement to an attorney and asking him to go over it with you. If you do ultimately decide to sign the agreement, I would try requesting some additional compensation or benefit for accepting the restriction. They might not give it to you, but you never know unless you ask.

Answer 3

"If you want to keep your job, you'll sign it." by TedEx
I highly disagree.

I won't go into all the details because "Non-Compete Agreements" are explained on About.com .There is a series of articles on the matter which seem fairly comprehensive and site actual cases.

The scope of the "agreement" would be the biggest determining factor for me personally. And, since you have worked there for 10 years, compensation for signing such an agreement is something I would seek.

Whatever course of action you think you might take, I would highly advise legal consult on this matter as such contracts are dealt with differently from state to state (i.e; legal precedence).

Here is a portion of the document from About.com:
"Regardless, some employers know, but don't care, that their non-compete agreements are not enforceable, in whole or part. They might try to get you to sign on the dotted line anyway. It's an intimidation tactic to protect that for which they have no right to protect. They count on employees not knowing or checking its legality. If you don't sign it, they might terminate or refuse to hire you, or deprive you of some benefit or perk. But the courts frown on employers behaving in this way, and you could have legal recourse if this happens to you........."

Good Luck!

Answer 4

Yikes! tough question. Sounds like your company is playing hardball.

I think you have to be honest and ask management and HR point blank (in a professional, non-confrontational way), like for example you could say: "this is new for me and I'm not that comfortable signing anything. would you mind explaining it to me and i'd also like to know what my options are?"

Make it sound like your looking to become more educated on the subject and this will force them to lay it on the line and be honest about the consequences of not signing.

When you meet with personnel, make sure you are in an office with the door open and that there's more than just one person in the room.

Take the form home with you and think about it. You may also want to talk to an attorney if you know one or if you are willing to pay one for some advice.

This is really tricky and if you are committed to not signing the agreement, you have to get comfortable with the idea of being let go.

Answer 5

I am not a lawyer, but I have had to sign one. Seems to be a double edged sword for them...if they do fire you for not signing it then it would be easier for you to compete with them. They will probably pressure you. If you are forced into signing one you could still open up a company like that as long as you cann prove you are targeting a slightly different customers.

Answer 6

I would advise that should search your inquiry at the law search engine

www.LawSolver.com

At LawSolver, individuals can explore any legal issue and immediately find free attorney answers. Free attorney answers to analogous inquiries:
(1) "Can I be forced to sign a non-compete agreement?"
(2) "Do I have to sign a no compete agreement at termination?"
(3) "Non-compete agreement."
(4) "What is a non compete agreement?"
(5) "Signing a non compete agreement - Avvo"

Additionally, articles & resources:
(1) "The Complete Divorce Process - Avvo"
(2) "Should Employers Sign Up for E-Verify? | Nolo"
(3) "Who needs to sign a lease or rental agreement? | Nolo"

Answer 7

They cannot force you to sign it, but they do have the right to fire you if you refuse to sign. So if you want to start a similar business, you can leave right now and start it.

Answer 8

I would say to have a lawyer read it and explane your right under the agreement. like if you are let go for any reason how that would effect your employment opportunities

Answer 9

If you want to keep your job, you'll sign it.