Employment Law Blog

Non-Compete Clause: How to Escape from Them – Video.

Un-shackle Your Non-Compete Clause Do you feel trapped by a non-compete clause?  Is there a job you want but feel chained to your current employer due to a non-compete clause.  You are not alone. Non-Compete clauses have been overused and abused.  More cases are being filed challenging the validity of non-compete clauses.  And employees are winning more of these cases.  This video provides three examples of arguments that have been used to defeat non-compete clauses. The tide is turning against the use of non-compete agreements.  Here are a few articles discussing the trend. Wall Street Journal Inc. – The Case Against Non-Compete Agreements See our main page on non-compete agreements. Transcript of video: Hi, I’m Robert Ottinger. I’m an employment lawyer, and I’ve been representing employees for over 15 years.  Many of our clients come to us because they want our help getting out of a non-compete agreement that’s keeping them from going to the job they want.  Well, I’m going to give you three examples of circumstances in which you can get out of your non-compete agreement. Example one is if your employer fires you without cause.  In that case, a non-compete agreement is pretty much void and unenforceable. Two, if your employer has changed the nature of your job or the way you’re paid after you signed the non-compete agreement, you can argue that the contract is now changed, so it can no longer be enforced. And three, one court last year held that a non-compete clause couldn’t be enforced because the employee had only worked there for less than two years, so that’s now a new factor some courts are looking at. Well, those are three examples, if you’re bound up by a non-compete clause, don’t give up hope.  There may be a way to get out of it. Contact us online or call us at 347-492-1904 for a free consultation about your non-compete clause.   We have been helping executives for over 15 years.

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Employment Law Blog

Getting Fired Without Cause Will Void a Non-Compete Agreement in New York

Non-compete agreements in New York are typically rendered unenforceable if the person subject to the agreement is fired without cause. Non-compete agreements are disfavored in New York and will only be enforced if there is a legitimate reason. Courts have generally found that no legitimate reason exists if an employee is fired without cause. If the company decides to let the employee go through no fault of the employee, then it would be extremely unfair to restrict that employee’s options in the workplace.  A company cannot terminate an employee and then try to prevent that employee from working for a competitor. But this rule does not apply if you are fired “for cause” or if you resign. Also, be wary of severance agreements that try to bind you to a non-compete agreement.   If you are fired or laid off, do not sign a severance agreement that says you are bound by a non-compete agreement.   If you do you could find yourself bound by the non-compete again. As Donna Ballman explains in the referenced AOL article, the law in each state is different. In California, for example, non-compete agreements are generally unlawful and are rarely enforced. Massachusetts is also considering similar legislation to remove non compete agreements as needless restraints on trade. In my opinion, New York should also outlaw non-compete agreements.

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Employment Law Blog

Non-Compete Agreements Do Not Apply to New York Workers Fired Without Cause

Fired workers in New York are not bound to non-compete agreements if they were terminated without cause. Non-Compete Agreements Void if Employee is Fired Without Cause Arakelian v. Omnicare Inc. concerned a Vice President of Business Development at a Fortune 500 healthcare company who was terminated after the company was acquired by Omnicare Inc.  As part of her severance agreement, the worker had signed a promise not to compete with the company for a period of two years after her termination and not to solicit former clients or workers for the same period of time. The court in its ruling affirmed the New York rule on non-compete agreements that they will not be enforced if the termination was not for cause. This New York rule is based on the assumption that a non-compete agreement can only be enforced if an employer would be willing to still hire the worker. This willingness to hire creates the “mutuality of agreement” necessary to affirm the restrictions. This New York rule sets the state apart from most other jurisdictions that will only strike down a non-compete or non-solicitation agreement if it is unreasonably expansive in time or scope. In New York, this analysis can only occur after an employee voluntarily quits or is fired for cause and had signed a non-compete or non-solicitation agreement. This rule does not just apply to New York employees, however, due to the nature of many non-compete agreements and non-solicitation provisions. As many non-compete agreements cover multiple states or even entire regions, what this rule means is that these agreements will not apply for competition or solicitation within New York state, regardless of the residency or other status of the competing or soliciting worker. So in this case, a Virginia resident working for a Maryland company who signed the non-compete agreement in Maryland cannot be kept from accepting a competing job in New York if she was fired without cause. This rule not only protects New York workers but is sure to attract such workers to New York who may be restricted from working in other states that do not have this rule. Although not explicitly addressed by the court in its opinion, it seems that a confidentiality agreement signed by an employee may not fall under this rule. The plaintiff did not argue the point so the court did not reach the question and it seems no case has directly addressed the issue. If so, that means that a former employee may still be restricted from using confidential client information in order to compete for or solicit clients, and other actions that could violate the agreement. This issue is sure to come up again in New York court and when it does this question may finally be answered. Until then, in New York, employers are severely limited in their attempts to restrict their former employees’ freedom of employment if they are the ones who led to their termination in the first place. This puts New York at the forefront of states in the nation in its protection of any employee’s right to work.

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