Signing a non-complete clause when joining a new company is an increasingly popular inclusion of the job offer that many employers use to limit your ability to work for a competitor in the near future and/or to prevent you from using knowledge that you gain from your new employer at other companies.
Typically, when you get a job offer in hand and find that there is a non-compete clause in it, people will tend to do one of two things:
1. They sign it without much consideration.
2. They read it over, think briefly about the possible ramifications and then sign it.
Let’s face it, when you are about to join a new company, you’re probably pretty excited about the possibility of doing so and aren’t too concerned about your next job after that and whether or not it could be limited by signing a non-complete agreement with the company you’re about to join.
Your local labor laws will have an impact on the enforceability of any non-compete clause that you end up signing as will the wording itself since you might find that the enforceability of some clauses can be challenged in court if they are unfair.
In general terms, a company can’t prevent you from working and gaining employment after you’ve left their employment but in the same instance, they might be able to limit your options for a period of time.
I recall an experience where a candidate I was helping find a new job – a fairly senior IT executive who had left a financial services firm to join another financial services firm – ended up having to quit his new job when his previous employer threatened to take both him and his new employer to court as they considered his employment there to be a violation of his non-compete agreement.
He didn’t believe he’d done anything wrong but when he and his new employer discussed it, they came to the conclusion that it was perhaps best that he quit to avoid any messy and possibly costly court case. In this case, he figured that even if he was found to be in the right, it probably wouldn’t have been a great start at his new employer who were also being threatened to get dragged into the situation.
So he ended up unemployed and spent a number of months out of work before until he was able to find a new job, with a company that wasn’t close to competing with his former employer!
The only personal situation I’ve had with a former employer was the first recruitment firm I worked with. Upon quitting, they sent me a letter to request that I return a black plastic card file box that contained hundreds of small 4″ X 6″ paper cards that I’d used to hand-write names of companies and hiring managers I’d spoken with over the previous 3 years. This was a file box and paper cards that I’d purchased myself, on my own accord. I was a “contractor” with this company – they only hired recruiters who were incorporated so they didn’t have to worry about doing all the stuff that they have to do when they hire a fulltime employee – so they clearly wanted the best of both worlds. They wanted to pay me like a contractor but treat me like I’m an employee where they owned stuff that I used in the company premises even though the box and cards were ones I’d bought and paid for!
I ignored the letter so they called me and upon reminding them that the box and cards were ones I’d purchased myself, they seemed to realize how silly and petty they were and the situation was forgotten.
Sales organizations are notorious for thinking that they own customers and while they can certainly try to prevent you from doing business with their customers for say 1 year after you’ve left the company, they certainly can’t order their customers to continue doing business with them after you’ve left if the customer doesn’t want to!
While I didn’t contact any active customers that my former employer was dealing with and while I didn’t violate the non-compete clause I’d signed, I had hundreds of names and contacts of people who were not customers in this file box and I wasn’t going to just turn this over to them for no good reason. It belonged to me, not them.
Incidentally this is the same company that fired one of my colleagues when she knew that another colleague was looking for a new job and didn’t tell them.
Seriously.
They fired her because she didn’t tell them that she knew that one of our colleagues was looking for a new job. And this was a recruitment company, a company that gets paid to take people out of other companies.
When it comes to non-compete clauses, it’s probably something you’re going to deal with moving forward at some point in your career.
Unless you’re a lawyer, if you have any concerns regarding a non-compete clause that is put in front you – whether it’s as you’re about to sign a job offer or after you’ve already started the company – you might want to consult one and pay a bit of money to do so up front to save you grief and pain in the future.
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