Non-Compete Agreements and Temp Agencies

[SingleQ]

Hope this is the right subforum. Anyway...

My significant other was looking for work about a year ago and spoke to an IT temp agency. He signed a series of contracts, including a noncompete agreement, and interviewed with potential clients, but never actually took a job through the temp agency and never received any compensation from them. A few days after he met with one of the potential clients of the temp agency, that client contacted him and asked him to work for them without going through the temp agency. He agree and took a job with them, and has now been working for them for nearly a year.

The temp agency recently found out and made a threatening call to his employer about violation of the noncompete (no specific threats, just expressing anger). I'm trying to determine whether the noncompete is actually enforceable in this case. My understanding is that there must be some compensation for a noncompete, and here he was never hired out or paid by the temp agency. In addition, I think from my research that in New York noncompete agreements for IT workers can only be enforced for up to six months, but I'm unsure what retroactive enforcement looks like after those six months are up.

Also, as a practical matter, I suspect he's probably not worth their time to pursue. Even if he might be liable under the noncompete, do you think they will find it worth their while to follow up?

Thank you for your help!

 

[cbg]

He needs to take the non-compete agreement to an attorney in his state to have it reviewed. There are limits to what a message board can provide and we cannot comment on the enforceability or legality of an agreement we have not read.

 

[Betty3]

New York non-competes are disfavored as a matter of public policy and are enforceable only to the extent that they satisfy the overriding requirement of reasonableness. (per court cases)

As cbg noted, the non-compete will have to be taken to a contract or employment attorney in your area for review & advice.

 

[Elle]

However, if a company is using the services of a temp agency to recruit and then hiring direct without going through the agency you better believe that company is going to be in hot water.

 

[lda01]

As stated above, it's hard to comment on the non-compete without knowing what's in it. A more likely scenario is that the company had a service agreement with the agency. Circumventing this agreement by direct-hiring a candidate introduced to them by the agency only a few days prior would likely violate the service agreement, as most would require a fee be paid if the candidate is hired by the client within a specified time frame, usually a year. It's interesting that the agency brings up the non-compete instead of the vendor service agreement. Makes you wonder if they neglected to get such a contract with the client, or were operating on a "handshake" basis. Pressing the non-complete issue might be their way trying to recover their placement fee. Just a theory.