Non-compete clause, is this enforceable?

[matth3w]

Here is the quick and simple story. Wife and I get orders to move to El Paso (I am active duty military she is my spouse). She takes $17k paycut to move out here and work for a company as an intelligence analyst for a sub-contractor for DHS. We get out here and only after we get out here and on her first day of the job do we find out:

- The 'recruiter' or whatever you want to call the person without question lied about her location of employment. We were told the employment was located in El Paso. The job listing was for El Paso. When she got here she found out on her first day the actual job was 31 miles further away in New Mexico. She was told it was temporary and then it suddenly became permanent. No reimbursement for the extra distance and my understanding is you cannot claim mileage TO work and from on your taxes, only if you need to use your vehicle in the course of your day for work (such as driving back and forth between ICE prisons and DHS offices)

- Also on the first day she was made to sign a non-compete clause saying she couldn't work similar work or competing work (very ambiguous as to what that means specifically and HR couldn't really answer the question) for 6 months from her last date of employment with the current contractor. We took this to mean that she couldn't go work the same exact job for another contractor in the same office (many of these gov't offices have a bunch of people doing the same job working different companies and contracts and want to prevent you from moving to a different company if you find out that they make more money doing the same work ).


Right now she is doing illegal immigration analysis for ICE but is thinking of applying for a job doing drug smuggling related intel work for a different contracting company that falls under the DEA (so she would technically fall under the Justice Department instead of the Department of Homeland Security).

Can they come after her for the non-compete? How does that work exactly when they do pursue you for it? Would you be able to plead your case to a court or something and show undue stress/expenses (or whatever you want to call it) due to the company lying about the location of employment?

Obviously the best case would have been to simply not take the job but she was already moved out here and we were sort of hung out on a limb after she quit her old job when we found out.

 

[army judge]

She wasn't forced to do anything. Everything she did was voluntary.

The noncompete clause is probably unenforceable. Those clauses aren't meant to make you a slave or deny you income.

Speak to an attorney, locally, and see what advice you're given. Or, take a chance and see what they do. Or, get a job in a different field.

Normally, unless you have a job making $300-400,000 a year or more, companies do nothing when you quit.

If it were me, I'd take the new job and unceremoniously quit the current one. I'd say the commute us too costly and us wearing my car down too fast. Less is always more!!!

 

[Michael Wechsler]

I agree with army judge. For the most part, the reason non-compete agreements are enforceable (when they are enforceable) is because the employee hired has company secrets that could be very damaging to the company if they ever took that confidential information elsewhere. For example, a CMO who has a knowledge of all the confidential client lists and targeted companies for potential clients in his head - that is a dangerous list to have. it doesn't seem that your wife is in the same position. The courts will generally not enforce non-compete agreements only to the limit that they are necessary.

Also remember that many companies may choose to agree to waive them - after all, if another company might be one which they can also do business with, it certainly wouldn't be beneficial to take such a hard line with the former employee. Also doesn't do well when hiring employees who hear about a company's reputation.

Only a local attorney can tell you for sure after looking at the non-compete clause but this should give you enough information to figure many things out. Best of luck to you!

 

[matth3w]

Here is the wording:

6. Non-Competition. Employee acknowledges that during the course of his employment, he will acquire proprietary and confidential information about the Company's business and will receive training on such proprietary and confidential information, including, but not limited to, the Company's clients, strategies, research, business plans, business methods, sales and pricing data, processes, technology and other information, some of which may be regarded and treated by the Company as trade secrets and that he will be responsible for contacting and developing relationships with customers on behalf of the Company. In order to protect the Company's critical interest in these relationships and information, Employee covenants as follows:
a. Employee agrees that for a period of six months following the last day of Employee's employment, Employee will not, directly or indirectly, compete with the Company by providing the same or similar services as those provided by Employee during the course of his employment with the Company.
b. The covenants in this paragraph 6 are severable and separate, and the unenforceability of any specific covenant shall not affect the provisions of any other covenant.
c. If any provision of this paragraph 6 relating to the time period or scope of the restrictive covenants shall be declared by a court of competent jurisdiction to exceed the maximum time period, or scope, as applicable, that such court deems reasonable and enforceable, said time period of scope shall be deemed to be, and thereafter shall become, the maximum time period or greatest scope that such court deems reasonable and enforceable and this Agreement shall automatically be considered to have been amended and revised to reflect such determination.
d. The Company and Employee have examined in detail this restrictive covenant and agree that the restraint imposed upon Employee is reasonable in light of the legitimate interests of the Company, and it is not unduly harsh upon Employee's ability to earn a livelihood.

 

[army judge]

Nothing in what you've posted, hereinabove, would lead me to conclude that a person is prohibited from seeking the kind of employment your wife appears to be considering.

 

[matth3w]

Thanks for the advice.

 

[Michael Wechsler]

I would agree with army judge and just want to add one more thing - if she's doing a different kind of work - government versus private sector - it may even be further removed from the non-compete clause you've just included.

Furthermore, it's six months and most non-compete clauses are for one year. This would lead me to believe that any non-compete issue would likely be negligible - even they concede that a full year would be far too much time and even this six months would be reduced if there was an issue. Do you think that any company would care to bear the costs of enforcing a non-compete for 2 - 4 weeks? Doubtful. I'm not saying that there certainly isn't a legal issue but I am saying that, from my experience, it is highly likely that there won't be an issue with that scary clause, especially with what you've told us here. Best of luck to the both of you.

 

[matth3w]

Thanks. Both jobs are private contracting jobs working for the federal government. However, one job is subcontracted via the Department of Homeland Security and one through the Drug Enforcement Administration. One job is dealing with illegal immigrants, one is focusing more on the illegal drug trade from Mexico. Obviously you could see how they could vaguely be intertwined, but overall, pretty far apart.

 

[Michael Wechsler]

But the bottom line is, could her work for company B take away business from company A? The answer is probably "almost zero if not zero" from what it seems. That's all you really need to know. The law protects the people's right to work without undue encumbrances such as a clause preventing her from working when the company isn't materially damaged by her working for the subsequent employer. That's really the only time to worry about non-compete agreements - where there is a real danger or likelihood that the confidential knowledge of Employer A can and will be used by Employer B to take away business from Company A.

 

[matth3w]

Nope they don't even compete for the same contracts.