Non-compete Agreements under "at will" employment
pak20193
6 Posts
Is a conflict created when a new employee is asked to sign a non-compete agreement as an "at will" employee? Does the employer create a contract by virtue of stating the consideration for the non-compete is the promise to employ?
Comments
My $0.02 worth.
DJ The Balloonman
Generally, non-competes do not set forth a definite (fix) time period of employment. Without a fixed time period for employment, i.e., 1 year, 2 years, etc., the employment is at-will unless you are in a state that recognizes the covenant of good faith and fair dealing or the implied contract theory that recognizes handbooks to be contracts.
Non-competes usually state that the employee cannot compete during the time the employee is employed by employer and for a certain time period post employment. Thus, by its terms, the non-compete does not alter the time period of the employment.
Non-competes, however, generally have to by reasonable in time and scope and the employer must have a protectable interest. These concepts vary from state to state. There is an emerging consensus among the states that the non-compete can be defeated if the employer breaches the employment contract, even if the contract is "at-will." Thus, more and more courts are carefully looking at those situations in which the employer discharges or lays off the employee and then tries to enforce the non-compete. It is becoming more difficult to do so.
Further, there are certain states, such as California, that do not allow non-compete agreements as a mater of public policy.
As you can see, the issue of the enforceability of non-competes is legally complicated and state specific. It is vitally important that you consult your legal counsel before entering into non-competes with employees.
Vance Miller
Editor, Missouri Employment Law Letter
Armstrong Teasdale LLP
(314) 621-5070
[email]vmiller@armstrongteasdale.com[/email]
This area of law is state specific and has some specific nuances. Please check with your company's employment attorney before taking steps in this area.
That's my two cents.... Jim
"The question raises a very interesting question in light of a very recent decision from the Md Ct of Appeals (which was reported in our December '03 issue) about the need for consideration to support any contract, i.e. an agreement to arbitrate all claims.
"The court found that continued employment was not enough consideration to support the agreement. That logic calls into question whether a promise to employ, on an at-will basis, would be sufficient. Interesting."
So it seems the law is even more muddled in MD than elsewhere. Kevin is at (410) 347-8779, [email]kmccormick@wtplaw.com[/email] .
Info about Kevin, Vance, and all of our attorney-editors (like big Forum profiles): [url]http://www.hrhero.com/necn[/url]
James Sokolowski
HRhero.com
I have never used this forum before and am very impressed with the level of expertise available.
Thank you very much.
In other words, you could have a non-compete agreement for 6 months after termination of employment, provided you were offering 6 months of salary if the ex-employee signs the severance agreement. Just something I learned during some recent reductions we went through here.