eSignature Lawfulness for Non-Compete Agreement in United States

How to eSign a document: eSignature lawfulness for Non-Compete Agreement in United States

how do i get around a non-compete agreement um very carefully uh there are two kinds of of agreements that most people call a non-compete agreement the first is a non-compete agreement that says you cannot go and compete against the the uh company a your former employer uh either by starting your own company or going to work somewhere else that's a direct competitor and that means with existing customers new customers potential customers period that's very difficult to enforce and essentially you have to prove that you have a compelling business interest to uh enforce it in the in the court is going to limit its enforcement uh just to achieve that compelling business interest and and so the court may say well i'm not gonna restrict you you the the agreement says that you have to uh stay out of um a uh a whole state well a compelling business interest is to protect a certain um reputation and goodwill in knoxville but no one's heard of either one of you in memphis so i'm not going to prevent you from going to memphis the the the kind of uh layman's term is that compelling business interest kind of means that the um the employee would be given a unfair competitive advantage by virtue of its prior association with the enforcing company in whatever its new venture is and so the court is gonna is going to restrict the person's activity to the extent that to bring it back from unfair to fair and that can look like a whole lot of different things and the way you defeat that is to poke holes in the idea that there really is anything unfair or special about the previous employment and that's where you begin to narrow the enforcement the second kind of non-compete is what i call a non-solicitation agreement it doesn't say that i can that i can't compete against you for new customers it says that i can't uh solicit customers or do business with customers that i had a relationship with the with the enforcing company while i was employed there and again that compelling business interest is almost always going to be enforced and the easiest illustration is a a salesperson who had a book of business that did business with the enforcing company and um did business in uh with these and the salesmen did the business with those customers most every court is going to say okay you got to stay away from those customers you can't do any business with them for one year two years um whatever the case may be uh two years is pretty much the outset of of that uh that you you routinely see in force um and uh and then sometimes you can even make the case well you know the acme portable whole company yeah that was a a a company that was a customer of uh company a but i didn't have anything to do with them that it wasn't in my book of business i never had any um contact with them and so the court may say well okay you can you can do business with that kind of person but you can't do business with somebody that you did business with directly and there aren't many black letter rules in in non-competes but that's pretty much a a good black letter rule that people ask me when i look at non-competes what the structure is and i say well you're almost gonna you're gonna have to negotiate over these these customers because the judge is gonna keep you from um doing business with with these other customers and nine times out of ten um there's a business workout or or for for those kinds of uh uh disputes because the cost on both sides is is is expensive and i've nev i've had very very few of those where ultimately you couldn't work it out unless there was some indication early on that the uh the target of the enforcement action had you know stolen documents or stolen customers or was working to set up the new business on the nickel of the uh you know while he was he or she was still employed by the enforcing company um where there's a lot of bad blood but even those eventually get get resolved