Non-Compete Agreement Validity

[harsh99]

Jurisdiction

New Hampshire

I am offered an full time employment(FTE) opportunity from a firm to which I am currently providing computer services as a consultant.

I currently work for a Consulting firm who contracted with the Client's preferred-Vendor("Vendor") to place me with this Client that offered me FTE opportunity. I have signed a non-compete agreement with the Vendor at the time of taking the contract and I am afraid if this agreement can cause issues if I accept the FTE offer from the Client.

The agreement essentially says I cannot provide "computer consulting services" to the client during the contract or 1 year after the contract expiration unless I am placed by and through the Vendor.

1. Since the agreement says I cannot provide "computer consulting services", do I need to worry about considering the FTE/direct-hire opportunity from the Client?

2. I signed this agreement in June 2014 for the initial contract which was for a term of "6+ months". The contract got extended 3 more times 6 months each but I did not sign any new agreements. Is the agreement still valid?

 

[d1amund]

The best money you spend in advance of this decision will be with a lawyer. A few hundred bucks now is better than thousands later. Do not take the word of either employer, or a bunch of people on the internet, speak to an attorney in your area.

 

[army judge]

I am offered an full time employment(FTE) opportunity from a firm to which I am currently providing computer services as a consultant.

I currently work for a Consulting firm who contracted with the Client's preferred-Vendor("Vendor") to place me with this Client that offered me FTE opportunity. I have signed a non-compete agreement with the Vendor at the time of taking the contract and I am afraid if this agreement can cause issues if I accept the FTE offer from the Client.

The agreement essentially says I cannot provide "computer consulting services" to the client during the contract or 1 year after the contract expiration unless I am placed by and through the Vendor.

1. Since the agreement says I cannot provide "computer consulting services", do I need to worry about considering the FTE/direct-hire opportunity from the Client?

2. I signed this agreement in June 2014 for the initial contract which was for a term of "6+ months". The contract got extended 3 more times 6 months each but I did not sign any new agreements. Is the agreement still valid?

If a client of the company that employs you wishes to hire you, that firm can approach the company employing you to hire you without issue.

Ask the potential employer if someone can reach out to your current employer's legal and/or HR officials to effect a smooth, trouble free transition.

Where I've seen this done, the approvals are received within a couple of hours, in writing, to get the contractor on the payroll of the client.

It's a true win-win for both entities, as well as the human being.

Ask around, you'll find most companies want to work with the law, not break it.

 

[adjusterjack]

Since the agreement says I cannot provide "computer consulting services", do I need to worry about considering the FTE/direct-hire opportunity from the Client?

Yes, you have to worry. "Computer consulting services" is a very broad term and you can perform those services as an employee as well.

Your definition of the term could be different than your employer's definition and could result in you being sued and having to spend thousands on an attorney to defend you.

I signed this agreement in June 2014 for the initial contract which was for a term of "6+ months". The contract got extended 3 more times 6 months each but I did not sign any new agreements. Is the agreement still valid?

Yes. The one year post employment requirement is not dependent on the date of the expiration of the contract but on the date of the termination of your employment. You've continued employment to date.

There is one thing, however, did you sign the non-compete agreement before you accepted the job with the consulting firm or on or after your hire date.

If you were not given the agreement to sign before accepting the position it would not be enforceable according to NH's Labor statute:

275:70 Noncompete Agreements. – Any employer who requires an employee who has not previously been employed by the employer to execute a noncompete agreement as a condition of employment shall provide a copy of such agreement to the potential employee prior to the employee's acceptance of an offer of employment. A noncompete agreement that has not been disclosed to an employee as required by this section shall not be enforceable against the employee, but all other provisions of any employment, confidentiality, nondisclosure, trade secret, intellectual property assignment, or any other type of employment agreement or provision shall remain in full force and effect.

2015 New Hampshire Revised Statutes :: Title XXIII - LABOR :: Chapter 275 - PROTECTIVE LEGISLATION :: Section 275:70 - Noncompete Agreements.

By the way, non-competes are typically enforced by the courts if they are reasonable. A one year post employment limit is virtually always considered reasonable and this one even more so since it only restricts you for that one client but not to work for anybody else (if your quoting of the agreement is all that there is).