Asking for a friend...

She is in international business/sales and is considering making a move.
She did not sign a non-compete when she began working at the company 8-9 years ago.

I know every company is different, but if they hand over a non-compete to sign when she leaves, and she signs it... what are the implications if she goes against the agreement? Lawsuit?

Also, what if she does not sign the agreement? Can they withhold the last paycheck, etc?

Thanks and Gig 'em!

She is finding that this is not the most up-and-up company.. one of the reasons she is looking to get out.

A former coworker told her that he was given a non-compete when he resigned.

I'd say that companies rarely go after former employees for non-competes. I've seen VP's in large tech companies make the hop to similar positions and nothing happens.

tandrus said:

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I'd say that companies rarely go after former employees for non-competes. I've seen VP's in large tech companies make the hop to similar positions and nothing happens.

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you may have misread the OP; there's only one reason I can think of that a company would ask you to sign a non-compete when you're on your way out the door.

IrishTxAggie said:

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Tell her to give them the finger and walk out. Can't make you sign a non-compete when you're walking out the door and they can't withold her paycheck either.

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Two fingers.

tandrus said:

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I'd say that companies rarely go after former employees for non-competes. I've seen VP's in large tech companies make the hop to similar positions and nothing happens.

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on the other side of the coin, I used to work for a tech company that was notorious for going after former employees.

What state is your friend in? Non compete agreements are not valid in California for example.

HollywoodBQ said:

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tandrus said:

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I'd say that companies rarely go after former employees for non-competes. I've seen VP's in large tech companies make the hop to similar positions and nothing happens.

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on the other side of the coin, I used to work for a tech company that was notorious for going after former employees.

What state is your friend in? Non compete agreements are not valid in California for example.

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It's a nonstarter. The friend doesn't have a non-compete in place and is concerned they'll try to force one on here when she leaves. Which they can't.

How do they hold up in Texas?

There is literally 0 benefit for her to sign a non compete when she resigns.

As said, two fingers and on her way.

htxag09 said:

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There is literally 0 benefit for her to sign a non compete when she resigns.

As said, two fingers and on her way.

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What if they agree to pay out her bonus if she signs?

AgLA06 said:

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htxag09 said:

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There is literally 0 benefit for her to sign a non compete when she resigns.

As said, two fingers and on her way.

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What if they agree to pay out her bonus if she signs?

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Well yeah, but that's not the scenario presented. Withholding a paycheck and offering a bonus are two different things. They can't withhold a paycheck. They can offer a bonus. Doubt they will, though. Even if they do, depending on the amount, it could be short sighted to accept. I'd be skeptical of anyone wanting me to sign a noncompete when I'm leaving vs when I'm starting.

Woods Ag said:

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How do they hold up in Texas?

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Don't know. I haven't worked in Texas in almost 20 years. So much for my plan to leave Austin and go to Colorado for a few years.

I do have a cousin who has spent time in Huntsville who used to talk about non competes in Houston all the time. But he is also known for literally jail house lawyering so I don't know how much stock to put into his scenarios.

For whatever it's worth, they can make her sign paperwork saying that she won't recruit from her current employer.

I got laid off in February this year and my employer made me sign documents stating that I couldn't say anything bad about them on social media and that I couldn't tell anybody why they laid me off or how much money they paid me out. My case was different because it was an involuntary separation and they paid me out.

HollywoodBQ said:

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For whatever it's worth, they can make her sign paperwork saying that she won't recruit from her current employer.

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No they can't. They can't make her sign anything on her way out the door. If they wanted that, they needed to get it before she left.

If they laid her off and gave her a package, they could make it a requirement. But this is person is leaving on her own.

HollywoodBQ said:

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For whatever it's worth, they can make her sign paperwork saying that she won't recruit from her current employer.

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No they can't.

She should flip the bird on them unless the offer is about a year of salary per year of duration of the noncompete paid in cash upon signing.

My lawyer friends in Texas tell me that non-competes are generally unenforceable, except to the extent one has to defend him/herself if the former employer goes after them. They usually won't bother unless you are hurting them business-wise.

Any lawyers want to take a look at my non-compete to see how binding it is if I were to make a change to a competitor? (Sales role)

Woods Ag said:

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Any lawyers want to take a look at my non-compete to see how binding it is if I were to make a change to a competitor? (Sales role)

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Not a lawyer, but have dealt with non-competes a good bit.

Lateral move or promotion?
Same area geographically?

lateral to a bigger company
same region

Woods Ag said:

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lateral to a bigger company
same region

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They'll likely hold your feet to the fire on that one, but it's all dependent on how it's worded. That one sounds pretty tough to squeeze by on though.

In some instances, the interviewing company will ask if you have a noncompete in place and if so they may ask for a copy to look over to see what they might be able to get by with.

I used to work with a guy in ag sales who left for a competitor in the same region of TX. Our company immediately challenged him on his non-compete and he had to sit out for 18 months. It effectively ended his sales career.

HollywoodBQ said:

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For whatever it's worth, they can make her sign paperwork saying that she won't recruit from her current employer.

I got laid off in February this year and my employer made me sign documents stating that I couldn't say anything bad about them on social media and that I couldn't tell anybody why they laid me off or how much money they paid me out. My case was different because it was an involuntary separation and they paid me out.

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That's different than quitting. You were laid off and this was part of a severance agreement I presume.

I've never understood how these things were legal. A customer isn't proprietary information. They don't only buy from one company. If the product the company sold was the reason a customer bought, there wouldn't be any need for a non-compete.

It's beyond hypocritical honestly. They love it for you to go get customers from someone else.

CenterHillAg said:

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I used to work with a guy in ag sales who left for a competitor in the same region of TX. Our company immediately challenged him on his non-compete and he had to sit out for 18 months. It effectively ended his sales career.

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This. Yet you still have people thinking non-competes are worthless in TX when in fact they aren't worthless. Bottom line it's who has the biggest pockets that makes the most difference....and usually that falls to the corporation and not the individual.

- If you hurt the corporation's bottom line enough by leaving
- and/or the management is vindictive
- and you don't have money to throw away on attorneys

then you better watch your back especially if you have a non-compete agreement.

Having said all that, regarding the OP....nothing to worry about and she shouldn't sign a thing. But the people that think non-competes in TX are worthless have never dealt with the situation

I work in Houston and I've seen several companies enforce non-competes and go after former coworkers who left to competitors. And these weren't large corporations either. It was a huge pain in the butt for my former coworkers to fight against.

Texas noncompete requirememts:

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a covenant not to compete is enforceable if it is ancillary to or part of an otherwise enforceable agreement at the time the agreement is made to the extent that it contains limitations as to time, geographical area, and scope of activity to be restrained that are reasonable and do not impose a greater restraint than is necessary to protect the goodwill or other business interest of the promisee.

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Pretty detailed.

Agree with everyone saying she shouldn't sign anything unless they are offering significant new compensation. My opinion is "significant compensation" in this case would be 1 yr of salary + target bonus + the cost of 1 yr of cobra for every year of non compete. I'd probably even go to 1.25-1.5x this as the ask because if you sit on the sidelines for 1 year you aren't getting a job on day one of your availability necessarily.

That being said, a few of you are acting like it's the company's fault in cases where someone signed a non compete and then isn't allowed to compete. The individual signed it and probably got paid something for doing so. It is a serious (potentially very serious) career decision to sign a non-compete. To do so thinking it won't be enforceable is not just irresponsible, it sounds pretty damn dishonest to me. This is coming from someone who is negotiating a non compete for myself. Because I understand my highest value role is doing what I'm doing in the industry and region that I'm doing it, I require the significant compensation I referenced above if the company wants to get rid of me and enforce the non-compete.

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There is legitimate talk about shutting down my region, and the new CEO has been given a couple of months to fix it or close it. So I am not sure it's worth their effort to come after me.

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Sounds like the company has a track record of making rash decisions, what makes you think it'd be any different in your situation? In the example I gave above, I'm guessing it took the legal team all of 15 mins to plug in names and locations to a prewritten letter regarding noncompete enforcement. Within 24 hrs they had an answer from the competitor that they would comply with the noncompete.

Your company is in survival mode, I wouldn't do anything without a lawyer reviewing your noncompete.

We had an employee of a sister company leave to create his own competing company, stealing a few clients. After that, management made every employee of both companies sign a ridiculous non-compete that said you couldn't work in a similar industry (civil engineering) in the entire state of Texas (our company only has business in North Central Texas) for 10 years. They also offered no additional compensation for signing.

I signed it because I had been working there less than a year and didn't really want to challenge it. I've always assumed that was pretty much non-enforceable though.