Is it Enforceable? Archives

Voluntary – Key Words & Phrases

Published on February 19th, 2019 by Alan L. Sklover

Sklover Working Wisdom keywords and phrases

Be on the lookout for . . .

“Voluntary,” as in “Voluntary Departure,” “Voluntary Resignation”
or “Voluntary Waiver”

You’re quite likely to find the word “voluntary” in several work-related legal documents. If you do notice it, that word may be very advantageous to you.

Generally speaking, “voluntary” means “done on one’s own free will.” It is synonymous with discretionary, unforced and optional. In legal documents, it often suggests that the act described was not required, not coerced, and not demanded.

Let’s say that, according to your employer’s Annual Bonus Plan, you are not entitled to your annual bonus if you “voluntarily” resign before the day it is paid. What if, two weeks before bonus payment date, you resigned and left your job in fear that your boss might beat you up in one of his infamous uncontrolled rages?

Was your departure “voluntary?” I’d say no. Are you entitled to your annual bonus? I’d say yes, although I’m confident that most employers would disagree.

You have a strong, reasonable and likely winning argument that the bonus is yours, so long as you spot, appreciate and point to the word “voluntary.”

In Repayment Agreements, you might promise to repay your employer in, as examples, a Sign-on Bonus Agreement, a Relocation Expenses Policy, or a Tuition Assistance Plan if you “voluntarily” leave before two years of service. What if you left earlier than that because, all of a sudden, your salary was reduced by 40%, and your family likes to eat three meals a day? (Some kids demand 4 or 5!!)

Is feeding your hungry family “voluntary?” I’d say No. Was your departure to take a better paying job truly “voluntary?” I’d say No. For this reason, you have a very good, and probably winning, basis to argue, with likely success, that your repayment is not required.

So, in this circumstance, too, you may very well not have to repay any sign-on bonus, educational assistance, etc., so long, that is, as you spot, appreciate and raise in your defense the word “voluntary.”

The same goes for whether a Non-Compete Agreement is valid or void, according to its own words. If the non-compete says it is valid if you “voluntarily” leave your job, and you can show that you are allergic to the new paint used throughout the office, then it is void as to you, so long, that is, as you spot, appreciate and raise the word “voluntary.”

There are many other legal documents that may contain the word “voluntary.” Look for “voluntary” in any and every workplace document, whether in an agreement, a company policy, an Employee Handbook, Stock Award, or other document.

You may be VERY GLAD you did.

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© 2019 Alan L. Sklover All Rights Reserved and Strictly Enforced.

“My former employer says he will waive my non-compete, but only if I repay him two months salary. Is this extortion?”

Published on May 1st, 2014 by Alan L Sklover

Question: Dear Mr. Sklover: I have worked for my employer not quite two months. Today I was told I did not meet his sales goals. However, if I wanted to return my salary to him, he would destroy the non-compete. Otherwise, if I stayed in the industry which I have worked in for the last 15 years he would be forced to pursue me legally and keep me out of work for a year.

Is that extortion?

Lori
Painesville, Ohio

Answer: Dear Lori: I have been helping people resolve non-compete issues for over thirty years. Yours is the first time I have heard of an employer saying, “Give me money and I will give you back your freedom to work.” I am (almost) stunned by his audacity. Here are my thoughts.

1. Though I have been negotiating non-competition agreements and related issues for over 30 years, this is a “new one” on me. Honestly, I do not recall ever hearing that an employer had the audacity to “sell” you back your freedom in exchange for money. I find that appalling, unfair and near evil. 

The closest that I have seen to what is happening to you was when a female client from Boston quit her job due to extreme sexual harassment – bordering on assault – and she was offered a release from her non-competition agreement in exchange for her providing a release of claims and confidentiality about the harassment. She took the deal, which was probably for the best. 

Asked to sign a non-competition agreement? Maybe you can avoid signing, or have it made less of a problem. How should you respond? Our “Model Letter: Response to Request You Sign a Non-Compete” shows you “What to Say, and How to Say It.™ To obtain your copy, just [click here.] Delivered by Email – Instantly! 

2. I don’t see this as extortion, which is a very serious crime, which is generally defined as (i) intentionally, (ii) threatening to harm someone, (iii) in order to gain something of value from them. Surely, your former employer is trying to get something of value from you, namely two months’ pay, and surely, too, he is acting intentionally. However, I do have some doubts that it can be said (ii) he is threatening to harm you. Take advantage of you? Yes. Actually harm you? I don’t think so. 

I think your former employer is saying to himself, “I have something she wants, and she has something I want. Maybe we can trade.” Thus, the element of “threatening harm” does not seem to me to be present here. What your former boss seems to be doing seems to me to be more like “threatening to exercise what he thinks are his legal rights.” I expect that many of my readers may see it differently than the way I see it, but I don’t think he is actually threatening to harm you. Rather, I think what he is doing is pretty close to extortion, but not “all the way there.” 

I am sensitive to the use of the word “extortion,” and where and when it is used, because so many employers and their attorneys have accused me of being an “extortionist” when they discover their employees know how to negotiate for themselves, using the information, insights and inspiration I have offered. Employers and their attorneys become upset, frustrated and downright cranky when their employees start to understand employment negotiation, and start doing it well for themselves, using all their available leverage.   

3. There are three primary reasons we don’t see “buy-back-your-freedom” offers such as the one your former employer has made: the legal concepts of (a) “secrecy,” (b) “necessity,” and (c) “equity.” The three basic legal rationales for employers’ requests that Courts’ enforce Non-Competition Agreements are that (i) employees will steal valuable secrets, (ii) even a lawsuit for monetary damages would not replace the great value of lost business secrets, and (c) “equity” or basic fairness cannot be achieved in any other way.

 In Court, an employer must establish that, without the Court’s help, (i) it will lose irreplaceable secrets, (ii) money is not an acceptable remedy, and (iii) in only this way can “fairness” be achieved. 

What your former employer is doing proves the exact opposite of all three: (i) it shows that he has no concern for secrets, at all, because he is willing to abandon them for the return of two months’ pay, (ii) your non-competition agreement really is not necessary to his protecting his business and business secrets, and (iii) what he is requiring you do is perfectly unfair. 

4. In fact, if you can prove what he is trying to do – asking for the return of two months’ pay in exchange for your freedom – that may go a long way toward gaining back your working freedom. I suggest you try to get your employer to repeat what he has told you, either (a) on the telephone while you are recording it, or (b) by use of email. If you do, you can then send him a letter, transmitted to him in a “provable manner, such as FedEx or UPS, in which you demonstrate that you have all you need to win any Court effort he may start to enforce your non-compete. 

Why? Because it shows that (a) you really don’t have any business “secrets” that he cares about, (b) even your former employer thinks that money is an acceptable alternative to the non-competition agreement, and (c) keeping you unemployable is 1,000% unfair or what we call in law “inequitable.” 

You should also tell your former employer that, if he does anything whatsoever to interfere with your next employment, you will take him to Court “in a snap,” and demand hefty damages from him for acting in such bad faith. 

We offer a model letter to convince your former employer to withdraw a Non-Compete Agreement. It is our “Model Letter: Proactive Attempt to Prevent a Potential Non-Compete Dispute” that shows you “What to Say, and How to Say It.” To get your copy, just [click here.] Delivered by Email – Instantly!

5. In your brief note to me I also noticed three factors in your favor that might help you defeat your non-compete, which should be mentioned in your letter. Courts look for certain other factors to determine whether to enforce a non-competition agreement. I noticed three of them in your favor in your brief note: (i) you were on this job for only two months, and so had little if any opportunity to learn many trade secrets, (ii) you have been employed in the same industry for 15 years before this short-term job, and thus may know more trade secrets than even your former boss, and (iii) you did not resign to go and work for a competitor, but instead were terminated with “cause” or bad conduct.

 6. By the way, keep in mind that you live in one of the states that permits one party to a phone call to tape the other party to the call without his or her consent. You are fortunate in that your home state of Ohio is one of the 38 states in the U.S. whose laws make it entirely legal to tape record a telephone call by one of the two parties to the call. The other twelve require both parties to the call to know someone is taping the call. So fear not about audiotaping a call with your former employer.

 Lori, I hope these thoughts are helpful to you in handling the difficult spot you’ve been placed in. I have a strong sense that, with this information and encouragement, you will not hesitate to stand up to the unfairness that has been placed in your path.

My Best to You,
Al Sklover 

P.S.: Our 185-Point Master Guide & Checklist to Non-Competition Agreements is a perennial favorite. It takes you step-by-step through everything you need to know, with lots of insights and “tricks of the trade.” To obtain your copy, just [click here.] Delivered by Email – Instantly!

Repairing the World,
One Empowered – and Productive – Employee at a Time™

© 2014, Alan L. Sklover All Rights Reserved. Commercial Use Prohibited.

“The Three Different Ways Non-Compete’s are Enforced”

Published on February 6th, 2013 by Alan L Sklover

Question: Alan: What is your experience with non-compete agreements in cases like mine where my former company (based in Massachusetts) terminated me without cause? It was a layoff and my position was eliminated. 

The term of my non-compete agreement is 24 months, and it does not seem fair that my former employer can restrict me from gaining new employment in my field of expertise. I have 20 years of experience in a niche area, and in fact that is why my former employer hired me six years ago. Now that they do not need me anymore, they want to enforce my non-compete agreement so that I cannot work for another, new employer that I have an offer from. 

The new company I am trying to go to work for is not considered a direct competitor and maybe once or twice in the past 4-5 years have the two companies competed for similar business. The new company will not hire me until I have a signed release but my former employer refuses to provide this. What should I do?

                                                             Steve
Cambridge, Massachusetts

Answer: Dear Steve: The dilemma you face is an exceedingly common one, and a shameful waste to our society of valuable time, effort, expertise and energy, so often for no good purpose. I have a lot of experience helping people in your situation. Here are my thoughts:     

1. The wisest analysis of non-compete agreements starts with the understanding that they are “enforced” in three different ways. Those who regularly read our blog know that I believe that “life is larger than the law.” By that I mean that most situations in life, while they often have legal implications and consequences, are just one aspect of our lives – no more. Though lawyers, and often Judges, seem to think that the world revolves around the law and the legal system, this sense of self-importance is way, way overblown. Employers know that the law is just one part of life, too, and with this in mind they deal with non-compete’s with the understanding of their “three-way” enforcement. So should you.  

Non-compete agreements confuse a lot of people. Our 185-Point Master Guide and Checklist for Non-Compete’s is like nothing else available elsewhere to educate you to what you need to know. To obtain a copy, just [click here].   

2. The first way – and most common way – non-compete’s are enforced is by “Prospective-Employer Fear,” which seems to be operative in your life at this time. That is, your “prospective employer” is too afraid to hire you with the risk of a non-compete law suit hanging over your – and its –  head. For your prospective employer’s own protection, its Human Resources staff or Hiring Manager no doubt asked whether you had signed a non-compete agreement, and no doubt you wisely told them “Yes,” or perhaps even showed it to them. On that basis, it is your prospective employer’s fear that is actually enforcing your non-compete agreement with your previous employer. I often refer to this as “self-enforcement.” 

However, some prospective employers are willing to say to valuable prospective employees in your circumstances, “I believe in you, and I believe what your previous employer is doing is wrong and indefensible, and I will stand up for you and by you, at least until a Judge tells me I cannot.” I particularly love “stand-up” employers, as I love any “stand-up” people, because the world would surely be a better place if it had more “stand up” people, or at least a few more people who were a little less afraid to stand up. 

You know, Steve, simply ignoring a bully is often the best way to deal with a bully. That is, to call their bluff. Sure, you may end up with a “bloody nose,” or even a “black eye,” but then again, you may just scare the bully off entirely. And, anyway, before too long everyone recovers from a “bloody nose” or a “black eye.” 

By gaining the support of a prospective employer by, among other things sharing with them your potential defenses to the non-compete, you defeat the first way non-compete’s are enforced: prospective employer fear.

We offer a Model Letter you can use to try to encourage your prospective employer to stand up for you. It is entitled “Model Letter to Your Next Employer Disclosing Your Non-Compete and Requesting Their Support if a Dispute Arises.” If you would like to obtain a copy for your use and adaptation for this purpose, just [click here.]     

In my experience, this is a very attractive option, as it works more often than you might imagine. This is because most such “threats” are more bark than bite. It is also because most “bullying” former employers fear going to Court as much as you do, mostly because they know that most Judges will either not enforce a non-compete, or limit the enforcement of a non-compete to just a few months. (See section 4, below.) And, hey – you may not even hear from your former employer at all. Yes, most threatening employers simply “go away.”

3. The second way – and less common way – non-compete’s are enforced is by a lawyer’s “Cease and Desist Letter” addressed to you and/or to your new employer. This would represent a “final warning” that, unless you stop working for your new employer, you and your new employer may get sued. 

This way of “enforcing” a non-compete takes a bit more courage to face, because it is an actual threat. That said, it is also an opportunity of sorts, as it gives you a chance to respond to it “in kind,” that is, with your own potential “defenses” to your non-compete, and thereby effectively stand up to this threat. There are several potent defenses to the enforcement of a non-compete. Among others, they include that (a) the employer, itself, has engaged in some sort of wrongdoing (sometimes called the “unclean hands” defense), (b) the employer did not honor its promises to the employee, and (c) the non-compete promise of the employee was “fraudulently induced.” 

Of course, your response to a “Cease and Desist” letter must be in writing, and is best sent by email, because email makes a permanent record of (a) exactly what you said, (b) exactly when you said it, (c) exactly how you said it, and (d) exactly to whom you said it. This is also an opportunity to “make a record” of both your employer’s point of view, and your defenses, and your advising your employer of your defenses to the non-compete agreement you signed.

You might want to review a blogpost I wrote entitled “How to Defeat a Non-Compete – 10 Good Defenses.” To do so, just [click here.] 

By responding to a threat with a spirited defense, you may well defeat this way of “enforcing” a non-compete you have signed. 

We also offer a Model Letter entitled “Response to Attorney’s Cease and Desist Letter Alleging a Non-Compete Violation.” To obtain a copy for your adaptation and use, simply [click here.] 

4. The third way – but by far the least common way – of enforcing a non-compete agreement is for the employer to take you, and possibly your new employer, to Court. I know this is easy for me to say, but the word “lawsuit” should not make anyone tremble, because – unless you have stolen secrets or contacted customers before you left your job – the most such non-compete “lawsuits” usually seek is an Order stopping you from working for the competing employer, and such Orders are not all that often granted. (While monetary “damages” are often alleged, they rarely exist, and are exceedingly rarely provable.)  

Your home state of Massachusetts, like many states, may or may not enforce your non-compete agreement based on the fact that you were laid off, and did not resign or commit misconduct. Massachusetts Courts, like the Courts of most states, look to the overall “equity” or “fairness” of the matter. In most states, as in Massachusetts, there is no clear rule that says, “If laid off without cause, you are free from a non-compete agreement that you signed.” That said, most Courts in most states do not “enforce” non-compete agreements when an employee is laid off, without a new job, holding no secrets, and not having engaged in any “bad conduct.”  

While most Courts are reluctant to keep any employees out of work without income unless given a good reason to do so, they are also reluctant to overturn a signed agreement (a) without a very good reason, and (b) thereby to possibly give the employee an unfair advantage if that is what is going on. So, the Courts generally require that they be given all of the facts of a situation before ruling, to ensure that what they do is  “equity” or “fairness,” and they depend on the unique facts of each case in making their decisions.  

I can tell you that in any non-compete battle, if you were laid off without having committed any kind of misconduct or “cause,” those facts are clearly in your favor. On the other hand, such a legal fight will undoubtedly cost some money. Yet still, the most likely outcome is that, at most, you would have to remain out of work for a few months, and the Judge might Order your former employer to pay you in the meantime.      

5. A possible suggestion: (In writing, or course) you might also consider offering your former employer a “compromise” of sorts, for example, a negotiated limitation on your restrictions, such as “It only applies to Competitors A, B, and C,” or “It does not apply to any Competitors unless their sales are in New England, with revenues over $10 million.” I once represented an employee of a very large “personal care” products company, with worldwide sales in the billions. She had a job offer with a “competitor” that had annual sales of approximately $1 million, and sold just one product. 

She made a written request directly to the CEO of the “mega”-company to be permitted to work for its “mini”-competitor – which was passed down to some lower-level attorney. The request was granted. The advantages of this course of action are twofold: first, it might just work, as it did for my client; second, if the suggested “compromise” is not granted, the employer’s refusal to show any reasonable degree of flexibility can be quite helpful when later shown to a Judge, as it just reeks of unfairness.

I almost always suggest clients proactively seek a resolution of their non-compete (or non-solicit) disputes with former employers before a legal dispute arises. We offer a “Model Letter: Proactive Attempt to Prevent a Potential Non-Compete Dispute” that you can adapt for your non-solicit agreement, that shows you “What to Say, and How to Say It.”™ To get your copy, just [click here.] Delivered by Email – Instantly! 

6. A second possible suggestion: With 24 months of the “threat” from your former employer  hanging over your career, consider initiating a “lawsuit” of your own. I say this because the combination of facts that you have presented, namely (a) experience in a “niche” area, (b) layoff without any misconduct on your part, (c) a job offer with a barely-competitive company, and (d) facing 24 months of unemployment, heavily weigh the “equities” or “fairness”  in your favor, and most Judges would either (i) force a compromise, such as a 3 month or 6 month restriction conditioned on your being paid during that time, or (ii) ruling that 24 months is just too much, and thus voiding the entire agreement. As noted above, being able to show the Judge you were flexible and honest with your former employer, and that they showed no flexibility or good faith, would also weigh heavily in your favor. Other than the legal expense, which admittedly is not “fun,” it seems you have little to lose, if the other approaches to regaining your freedom do not work.     

As you may well imagine, we also offer a Model Letter for this purpose. If this is of possible interest to you, just [click here.]  

Steve, there is no magic solution to the problem you face. However, non-compete’s work on fear, and in every aspect of our lives, “Faith Overcomes Fear.” Always does. Always will. I urge you to go forward with faith that the “right thing” will come your way, so long as you step forward to greet it with faith and in good faith. This is not based on mere conjecture, but a lifetime of doing this sort of thing, and seeing what works. Faith just has a way of making the “sun shine,” although you may hear some “thunder” and get a bit “wet” before you begin to hear the “bluebirds” chirping.            

My Best to You,
Al Sklover 

P.S.: Want to learn more of this “good stuff” regularly? You can Receive Each of Our Blog Posts Automatically, For Free, if you just [click here.] And we promise: we never sell, lease or let anyone see our subscriber list. Never, ever. 

Repairing the World –
One Empowered and Productive Employee at a Time ™

© 2013 Alan L. Sklover, All Rights Reserved.

“If tied to an unpaid bonus, is a non-compete enforceable?”

Published on November 23rd, 2012 by Alan Sklover

Question: Alan, I signed a non-compete when I started work as a marketing executive at a local company. The non-compete was tied to entering into a bonus plan. They did present me with a bonus plan, but never paid it out.

The employer represented to me that the bonus I would receive had a target of $40,000, or more. They never paid anything, saying that the company did not perform well, but that was not my fault.

Now they want to keep me from working in this entire industry for 12 months. Your thoughts?

Joe
Ann Arbor, Michigan

Answer: Dear Joe, As you probably know from reading my articles on non-competes, a significant part of my law practice is in resisting and fighting them. Though the facts and circumstances you describe are limited, I do think they suggest you have two good reasons – perhaps more – to defend your right to work for whoever you please, doing whatever you want, in any place you choose. Here are my thoughts:

1. As I often point out, a non-compete agreement is a kind of contract, and all contracts must be read carefully, that is, word for word, punctuation mark for punctuation mark. Honestly, Joe, I cannot tell from your description of your non-compete agreement, and how it may be “tied to a bonus plan,” whether or not the non-compete is dependent upon the granting of a bonus, and if so, how much of a bonus. I feel like a doctor who is being asked to diagnose an illness, but is not permitted to “examine” the patient. To make such a determination, I would need to “examine” the entire non-compete agreement extremely carefully. I would also have to read the “promise” of the bonus carefully, too. And, too, I would have to read the bonus plan. That is the case for any legal document, but most especially for contracts, of which non-compete agreements are one kind. Judges say it best, “Don’t tell what the document meant to say, just tell what its words are.”

2. If you were promised something – such as a bonus – for signing a non-compete, and the employer never “delivered” what it promised, then the non-compete is void for “failure of consideration.” Imagine, for the moment, that a person named Bob promised to sell a car to a person named Mary for $100, and Mary did not pay the $100. Is Bob still obligated to give Mary the car? Of course not. What if he already delivered the car to her? The law says that Bob can take it back. Mary’s failure to pay Bob the $100 is what us lawyers call that a “failure of consideration.”

If there is a “failure of consideration,” then the other party can either (a) refuse to deliver his or her part of the bargain, or, if already delivered, can (b) demand it back. In a non-compete situation, a non-compete that suffers a “failure of consideration” by the employer would legally permit the employee to declare the non-compete null and void, and of no effect, and work without any future restriction.

3. Also, if the employer promised a certain size bonus, but never really intended to pay out such a certain sized bonus, then your signature on the non-compete agreement may have “fraudulently induced,” that is, you may have been tricked into signing the non-compete agreement. Sometimes employers use the word “bonus,” but really mean “target bonus.” The two are not the same, not by a long shot. Also, sometimes employers say “about $40,000,” and they don’t intend to pay that amount, but instead only $5,000, which they claim is “close to $40,000.” These things, too, would likely make a non-compete null and void, and of no effect.

Bear in mind, though, that what is inside a person’s mind, what lawyers call “intent,” is something that is pretty difficult to prove. It is much easier to prove (a) a promise made, and (b) a failure to “deliver” on that promise, as described above, because the proof of those things are often verifiable by witnesses and documents, while “intent” is often just “between the ears.”

Your dilemma with your non-solicit agreement might be resolved without a “war of letters” or your dismissal from your new employer. What should you do?” The answer is almost always to proactively seek a resolution of your non-compete or non-solicit dilemma with your former employer before a legal dispute arises. We offer a “Model Letter: Proactive Attempt to Prevent a Potential Non-Compete Dispute” that you can adapt for your non-solicit agreement, that shows you “What to Say, and How to Say It.”™ To get your copy, just [click here.] Delivered by Email – Instantly!

4. The first problem you will likely face, though, is that your future employers may not want to hire you unless you promise, in writing, that you are free from such restricing agreements, which you cannot yet do. It is becoming more and more common for employers, when they interview job candidates, or when negotiating over items such as salary, to ask the job candidate “Can you promise us you have not signed any agreement that might limit your ability to do this job for us, if we hire you?” That is how most non-compete agreements are “enforced.” I call it “self-enforcement” of a non-compete agreement.

If you do not tell the truth about having signed a non-compete, and that your former employer may view it as enforceable, your new employers could later conclude that you lied to them, and fire you for dishonesty. Ouch!!

Contemplating a new job, and need to disclose your non-compete? For you we offer a “Model Letter Disclosing Non-Compete to Prospective Employer; Requesting Support If Dispute Arises.” To obtain a copy for your adaptation and use, just [click here.] What to Say, and How to Say It™ Delivered by Email – Instantly! 

5. The second problem you may face is that your former employer may disagree with your view that the non-compete is “null and void,” and may have its lawer send a “Cease and Desist” letter to your new employers, threatening a lawsuit. This is the second problem you face: even if you believe the non-compete is void and unenforceable, your former employer may disagree, and send a letter to your new employer, threatening a lawsuit if they continue to employ you. That could also get you fired from your new job.

Have you received a letter from your former employer’s attorney demanding you “Cease and Desist?” Are you concerned you might receive one? We offer a Model Letter entitled “Response to Attorney’s ‘Cease and Desist’ Letter Alleging Non-Compete Violation.” It shows you “What to Say, and How to Say It.™” To obtain a copy for your adaptation and use, just [click here.] Delivered by Email – Instantly!

6. To get around these potential problems, it would be best to get your former employer’s agreement that the non-compete is null and void. That takes a bit of “navigation and negotiation,” and, fortunately, how to do that is well-explained in our Resource Center newsletters and Q&A’s, YouTube videos, and our Model Letters, including our 185-Point Master Guide and Checklist to Non-Compete’s.

Our 185-Point Master Guide & Checklist to Non-Competition Agreements is a perennial favorite. It takes you step-by-step through everything you need to know. To obtain your copy, just [click here.]

7. If that does not work, your next best step would be to consider consulting or retaining an attorney in your area who is experienced with non-compete agreements. Without intending to offend any of my attorney colleagues, non-compete’s are a kind of specialty, and I would strongly encourage you to consult or retain only an attorney who has real-life experience with non-compete battles – who is able to, yet hopefully reluctant to – go to Court if all else fails.

If you need to locate a good local attorney, your Washtenau County Bar Association has a legal referral service. They can be contacted at 734.994.4912; their website is www.washbar.org.

I hope and expect that, if you need to consult with or retain an attorney, the information available on our blogsite will make you a very “informed and empowered customer.”

Joe, you are in a bit of a sticky wicket that requires some thought and effort to get out of. Don’t lose faith, though, as most people who (a) apply our information and (b) their perseverance usually (c) prevail.

My best to you,
Al Sklover

P.S.: One of our most popular “Ultimate Packages” of forms, letters and checklists is entitled “Ultimate Non-Compete Package” consisting of six Model Letters/Memos for non-compete navigation and negotiation, as well as our 185-Point Non-Compete Guide and Checklist.” To obtain a complete set, just [click here.]

© 2012 Alan L. Sklover, All Rights Reserved.

“Are my relatives and friends legally obligated by a non-compete agreement I signed?”

Published on July 19th, 2012 by Alan L Sklover

Question: Are my relatives and friends legally obligated by a non-compete agreement I signed?

Mary
Bristol, Tennessee

Answer: Dear Mary: Don’t take it personally, but your question sounds so simple, it sort of sounds almost like a “trick” question. Is it possible that “something else” is going on?   

1. Only the person who signed a non-compete agreement is bound by its terms. Any agreement is enforceable only by the parties to it. For others to be bound, they have to somehow – in writing, by their conduct, or on an audiotape or videotape – agree to be bound by it.

2. Sometimes people try to “get around” the terms of a non-compete agreement by having a relative or friend act in their place until the time period of the non-compete agreement has expired. Many times people have said to me words to the following effect: “I plan to have my brother open up a competing company, and I will show him what to do and how to do it, in order to get around the non-compete agreement. Nothing will be in writing with my name on it. After the non-compete restriction expires, I will become an official employee or an official owner.”

This would violate the terms of most non-compete’s, most of which say “I will not directly or indirectly compete.” This would also violate the spirit of non-compete agreements.

3. In my experience, those who try to “skirt” a non-compete in this way usually get caught. It’s a “small world,” and most industries are sort of a “small club.” Most everyone in a certain industry knows most everyone else in that industry. When a new competitor arrives on the scene, it is usually noticed. It is especially noticed when the new competitor has no known experience in the business. It’s amazingly common that, sooner or later, someone always seems to say, “Hey, isn’t that Mary’s brother, Joe?” Or, a customer may see you in the office, or something like that, seems to inevitably happen.

4. Don’t get me wrong: people can violate agreements if they wish, but it is important that they understand and appreciate the risks of doing so. I don’t tell people what to do. Instead I counsel them on the potential risks and rewards of taking certain actions, and often help them do what it is they want to do. Taking risks is the essence of business, and I encourage people to take risks, if and when they have considered the potential implications. But I do not pass judgment on those who take risks, even the risk of violating a non-compete agreement.

Just in case you do have a problem, Mary, we offer a Model Letter entitled “Response to an Attorney’s Cease-and-Desist Letter Demanding You Stop Violating a Non-Compete.” To obtain a copy, just [click here.]

Thanks for writing in, and I hope this helps.   

Best,
Al Sklover

Don’t forget: we offer
Model Letters, Memos, Checklists and Form Agreements
for almost every workplace issue. Just [click here.]

 Repairing the World –
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© 2012 Alan L. Sklover, All Rights Reserved.


Alan L. Sklover

Alan L. Sklover

Employment Attorney
and Career Strategist
for over 35 years

Job Security and Career Success now depend on knowing how to navigate and negotiate to gain the most for your skills, time and efforts. Learn the trade secrets and 'uncommon common sense' of Attorney Alan L. Sklover, the leading authority on "Negotiating for Yourself at Work™".

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