Two Year Non-Compete Agreement

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Two Year Non-Compete Agreement

Postby Anonymous User » Tue May 14, 2019 10:21 am

Hi all - I have been with my current employer for a number of years and what I do is partly legal work (drafting and negotiating contracts), but mostly research and analytics based. My salary has doubled since I've been here (but was paltry to begin with) and there is definitely potential for a higher salary but leadership potential is limited and my salary is still lower than a first-year big law attorney. It is 9-5 and I have a second income through a business I started that almost matches my salary here in 10-12 hours a week. All in all, this is the kind of place I'd like to be long term because it allows me to maximize my earning potential (with my side business) while still being able to maintain a "healthy" personal life. I also really like the upper management, but don't necessarily get along well with everyone else and often feel disrespected by various non-executives in the office.

Recently, we were all asked to sign non-disclosure agreements that are standard except for that they preclude us from working for any other similar business if we leave. I believe my term is the longest - two years, and because I'm one of the only lawyers and what I do is so niche and nuanced to our exact business model, I'm much less marketable in other types of businesses. It's about 3 to 4 times longer than sales and administrative people whose skills are less tailored to our exact business model. My hunch is that attorneys with a very niche specialty are really only valuable in that specialty area, and as there are only 4 or 5 companies that do what we do, I feel like signing this has the potential to turn out badly.

My concerns are amplified by the fact that I have been yelled at recently for small things (being late to the office even though I stay late and always get my work done, and my office being messy). In the case of the latter, I was threatened with losing my office if I don't clean it daily, which is definitely reasonable but seemed aggressive and made me worry about my job stability and reputation. At the same time, I've been told my work product is fantastic and the only issue is the administrative stuff. I also really like the executive board, but don't really get along well with the administrative staff despite efforts to try that sometimes make it much more difficult to perform my job. For instance, I had to book a conference room for an important group call with opposing counsel (which we're only allowed to do in conference rooms) but was told I lack authority to book a conference room, which was untrue and could have harmed our clients' position and created a great deal of stress as the lack of respect towards me put us in a position where we were essentially incompetent under the code of professional responsibility. In addition, a lot of my day is spent performing administrative functions because I have no administrative support.

These things annoy me but I like the work I do and the hours are good. I'm also signed to a l/t contract but it will have to be renewed at some point, and if the disrespect other departments have for me escalates to a point where I am unable to perform, I'd have to work elsewhere. I also don't want my bargaining position to be hurt by the fact they know I can only work here so I'm debating whether it makes sense to sign the non-compete - I just feel it creates a lot of risk, but I don't 100% trust my job stability despite being told I should and these issues (cleanliness, tardiness) only impact my earning potential and am worried that in the event I am fired or my contract isn't renewed, my career would essentially have to start from square one.

The way I see it, the best case scenario is not signing it and staying here whereas the worst case would be signing it, being laid off/not having my contract renewed and then having to start my career at square 1. The middle case would be to proactively look elsewhere, which would be a distant choice to option one.

Just curious if anyone's seen provisions like these before, and whether they think I should go to great lengths to avoid signing it?

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Re: Two Year Non-Compete Agreement

Postby Necho2 » Tue May 14, 2019 10:42 am

Two years sounds like a unreasonable restraint on trade to me. Check your state's caselaw on restrictive covenants and see if it's enforceable. This is obviously not legal advice, I'm an anon poster on a forum.
Last edited by QContinuum on Wed May 15, 2019 6:31 pm, edited 1 time in total.
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UnfrozenCaveman

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Re: Two Year Non-Compete Agreement

Postby UnfrozenCaveman » Tue May 14, 2019 11:13 am

In addition to the above, what are the consequences of a breach?

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Re: Two Year Non-Compete Agreement

Postby Anonymous User » Tue May 14, 2019 11:17 am

OP: They are enforceable and I'm definitely not soliciting legal advice - just asking whether this is customary or if others have seen this before (I forget what my law firm NDA had but obviously firms don't restrict attorneys from jumping to other firms). The paranoid part of my brain says that although I add a lot of value, I'm disliked and this could be an attempt to let me go during a slow period while ensuring I can't add value to a competitor - it would probably take a year for someone outside this field to catch up to a similar performance level so there would be value in keeping me out. Of course, everyone is replaceable and the company has given me no reason to think they're interested in boning me (in my dealings, only the opposite has proven true) but I've always been the type to focus on worst case scenarios.

In the event of breach, like any contract, I can be held accountable for foreseeable damages so if I identify something that makes new co. money they likely wouldn't have otherwise made that current co. would have made, I'd be liable for those damages. I think this is very likely and that they'd have an easy case, but think they're way too classy to sue me unless they deemed it a business necessity (which is probably unlikely). I'm also concerned about the C&F ramifications for knowingly violating a contract specifically relating to legal employment.
Last edited by Anonymous User on Tue May 14, 2019 11:20 am, edited 1 time in total.

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LaLiLuLeLo

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Re: Two Year Non-Compete Agreement

Postby LaLiLuLeLo » Tue May 14, 2019 11:17 am

No way I would sign that. Doesn’t seem worth it for what you get (nothing). If it comes up again at contract renewal I’d definitely negotiate a far shorter period. 2 years is insane. And this job doesn’t even sound worth being locked up.

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Re: Two Year Non-Compete Agreement

Postby Anonymous User » Tue May 14, 2019 11:23 am

LaLiLuLeLo wrote:No way I would sign that. Doesn’t seem worth it for what you get (nothing). If it comes up again at contract renewal I’d definitely negotiate a far shorter period. 2 years is insane. And this job doesn’t even sound worth being locked up.

I do earn six-figures for a job that is very low stress beyond the logistical BS and that I'm pretty naturally good at. The work itself and interactions with upper management are very easy and pleasant. I don't necessarily know I can find another 40-hour a week job that would pay similar with good people at the top outside of the 4 or 5 competitors (but it's possible their upper management is terrible). I also like stability.

But would standard procedure here be to sign it back but cross out the non-compete?

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Re: Two Year Non-Compete Agreement

Postby mvp99 » Tue May 14, 2019 11:49 am

I think the question is what’s the side business and can you send me the idea. Thanks
Last edited by QContinuum on Wed May 15, 2019 6:31 pm, edited 1 time in total.
Reason: Outed for anon abuse.

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Re: Two Year Non-Compete Agreement

Postby Anonymous User » Tue May 14, 2019 11:55 am

Anonymous User wrote:I think the question is what’s the side business and can you send me the idea. Thanks

Can't say without outing myself. It's mostly based on developing a reputation as being one of the best at something outside of legal practice, which commands a high hourly rate and doesn't require me to work for a company but the workload is peaked by my lack of marketing/business acumen and disdain for sales/marketing. I am also fairly bored of it but can't justify not doing it.

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Re: Two Year Non-Compete Agreement

Postby albanach » Tue May 14, 2019 1:17 pm

I wouldn't just strikethrough and return, I'd ask for a meeting.

Bring a copy of your state's rule 1.9 equivalent and explain that the firm is already protected from you being adverse to them, which is the primary goal of a non-compete.

I also think it would be wise to get employment counsel to take a look at whether a 2-year non-compete would be enforceable given your facts and circumstances. Do your state courts really find that reasonable, given rule 1.9? Have they ever enforced a non-compete against an attorney, particularly one for that length of time?

You should also be establishing how easy/difficult it would be for you to move to a competitor given your own obligations to your former client. Doing that now makes sense, so you are prepared if you enter the job market.

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Re: Two Year Non-Compete Agreement

Postby Anonymous User » Tue May 14, 2019 4:26 pm

Please keep us posted. I'd love to hear how this turns out. I did some initial research when I was interviewing at a place that I suspected would try to get me to sign a noncompete.

I didn't end up getting the offer, but my strategy would have been to initially decline to sign and explain that it looked like an ethical violation for the attorney offering it and for the attorney signing it -- i.e. could put *my* license at risk -- because of Rule 5.6's prohibition on participating in "making" an agreement not to compete, and would also probably be unethical for the in-house lawyer who put the agreement together for you to sign. If pushed, I'd probably have signed it, but would have tried to caveat it with a language like "to the extent this agreement is enforceable and does not violate Rule 5.6 of the [State] Rules of Professional Conduct..." Obviously this not legal advice but there is at least some authority that would back up this argument.


Rule 5.6 is below:

A lawyer shall not participate in offering or making:

(a) a partnership, shareholders, operating, employment, or other similar type of agreement that restricts the right of a lawyer to practice after termination of the relationship, except an agreement concerning benefits upon retirement; or
(b) an agreement in which a restriction on the lawyer's right to practice is part of the settlement of a client controversy.

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Re: Two Year Non-Compete Agreement

Postby Anonymous User » Tue May 14, 2019 6:06 pm

OP here: Yeah, it's just annoying that these agreements were handed out with obligatory signatures years after everyone else started working here and I already have a contract specific to me that's been in place for years and I never asked to edit it. Thank you for the 5.6 reference. I completely forgot that after my PR final ha. I think that's the play here.

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Re: Two Year Non-Compete Agreement

Postby glib » Thu May 16, 2019 7:09 pm

A lot of states have either statutory or case law stating that non-competes are unenforceable or they severely restrict their applicability.

That being said, 2 years is a very long time. 6-12 months is more reasonable.

Also, the non-compete should only kick in if you voluntarily quit. It shouldn't be the case that they fire you and now you can't get a job in your area of specialty.
Last edited by QContinuum on Sat May 18, 2019 1:30 am, edited 1 time in total.
Reason: Outed for anon abuse.

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RedGiant

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Re: Two Year Non-Compete Agreement

Postby RedGiant » Fri May 17, 2019 1:24 am

Another perspective here--what is the consideration for signing the contract? Continued employment isn't valid--you already have that. So if they're just shoving it in front of you and telling you to sign, I would ask this!

And if you are good at what you do, who's to say you can't do this elsewhere? Like right now? That's why they're worried enough to get you to sign this. So...consider putting out soft feelers to see what you're worth on the open job market. Because that's how much savings you might need for 2 years if this is enforceable (which it likely is not).

Also, the whole rest of your email re petty slights, etc....it doesn't sound like the greatest workplace. I personally wouldn't want to sign a non-compete for that.

albanach

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Re: Two Year Non-Compete Agreement

Postby albanach » Fri May 17, 2019 9:47 am

Anonymous User wrote:Another perspective here--what is the consideration for signing the contract? Continued employment isn't valid--you already have that. So if they're just shoving it in front of you and telling you to sign, I would ask this!


As I understand it, many states do allow continuing employment to serve as consideration. Presumably this is more prevalent in at-will states, where it can be argued that you have no expectation of continuing employment. My state also holds that if there is an attestation of sufficient consideration in a contract, the court will accept that without further inquiry.

That said, since there are states where this is insufficient, it is worth considering. Whether it's worth raising or not depends... They could offer an additional $100/year on your salary as consideration. Equally, if you felt forced by the circumstances to sign and think it may be unenforceable, you might want to save that card in case it's useful later.

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Re: Two Year Non-Compete Agreement

Postby Anonymous User » Wed Jun 12, 2019 10:06 am

So I stated I can't sign it because of ethics and got some pushback but they had outside counsel look into it and never followed up. At this point, it seems like a soft don't ask-don't tell thing with other employees, but in fairness, my non-compete was twice as long as anyone elses. They did remark the contract I signed is even more restrictive. It's a bit convoluted because the work I do is probably more business than legal oriented even though I handle responsibilities that only a lawyer could handle in addition to duties and decisionmaking tasks one would associate with a business analyst. While I like working here, I handle my role without any support while every other department is chalk full of support, which I'm generally okay with as I can get it all done 9-5 but get irritated when I get crap for coming in late or taking a long lunch as I'm close to 100% focus when I work and my department previously required 3 employees vs. one.

Regarding the non-compete, I did not expect the economy to improve as much as it did at the time. While I make six-figures for a 9-5 and the workload is light enough that I can run another six-figure self-employment gig while also working on a non-fiction book I've been researching for a few years, I did make the company several million dollars in profit over the past several years. Although I've never really perceived myself as such, I have a physical disability that caused me to face discrimination in the big law world and elsewhere that I've never encountered here and this means a lot to me. For anyone curious, this is the reason I'm willing to tolerate more shit as I've always felt a greater sense of loyalty to those who treated me as an equal. That said, I don't like opening the door to being fucked and feel like my performance and rejecting solicitations from competitors speaks for itself so under no circumstances will I sign anything additional. As others suggested, it's not like my compensation is significant enough to justify signing stuff competitors would not make me sign.

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NotASpecialSnowflake

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Re: Two Year Non-Compete Agreement

Postby NotASpecialSnowflake » Wed Jun 12, 2019 3:15 pm

I don’t have any advice regarding the non compete, but I do want to say that you don’t owe these people any extra loyalty because they treat you like an equal.

Just from reading your posts, you’re clearly a hard working person with a talent in a niche area. That’s valuable. Your company thinks so too, otherwise they wouldn’t be asking you to sign a non-compete, especially for that long.

You don’t have to feel inferior to anyone. You deserve to be treated like an equal because of 1) your talents and 2) the fact that you’re a human being. No matter what disability you have.

Personally, I wouldn’t sign it. Your company doesn’t seem like a great place and your talents are in demand. Go use them for a better company. But that’s just my two cents.

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Re: Two Year Non-Compete Agreement

Postby icansortofmath » Wed Jun 12, 2019 6:10 pm

I’d seriously ask about fast tracking you to partner and you’re willing to sign non compete as part of partnership agreement.

I had one professor that tried the same thing and failed. He lateralled to a midlaw as partner instead.

If you’re as valuable as you claim and as your employer seems to think, you must have some way to extract some of that value.

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Re: Two Year Non-Compete Agreement

Postby Anonymous User » Fri Jun 14, 2019 10:07 am

NotASpecialSnowflake wrote:I don’t have any advice regarding the non compete, but I do want to say that you don’t owe these people any extra loyalty because they treat you like an equal.

Just from reading your posts, you’re clearly a hard working person with a talent in a niche area. That’s valuable. Your company thinks so too, otherwise they wouldn’t be asking you to sign a non-compete, especially for that long.

You don’t have to feel inferior to anyone. You deserve to be treated like an equal because of 1) your talents and 2) the fact that you’re a human being. No matter what disability you have.

Personally, I wouldn’t sign it. Your company doesn’t seem like a great place and your talents are in demand. Go use them for a better company. But that’s just my two cents.

As OP, I'd just say the fact something should be in place does not mean that it is. In hindsight, we'd say that black lawyers of equal competence to white lawyers should have been treated as though they were their equivalent as white lawyers or at least have been partially penalized for their skin color but not outright discarded. Similarly, while it would be great for lawyers in a wheelchair that produce X to be treated as though they were a regular attorney who produced say 20-25% less than X (as some penalization is to be expected as equal treatment is an unrealistic expectation), the reality is not that. At many places, the fact they are in a wheelchair will be an automatic disqualification and I think you kind of have to expect that conceptions of fairness and reality will not always match going in. Consequently, I think I speak on behalf of anyone in saying that not being automatically disqualified on the basis of a disability in the legal world is attractive. It's difficult for your standard attorney to understand as we don't really think about it, but the reality is that some level of discrimination is something one must expect and not having wholesale discrimination is a positive. If we're painting by analogy, a legal world in which black lawyers in the top 10% are treated as white lawyers in the top 50%, we're looking at a great outcome. Any reality in which one is not discarded solely on the basis of something unrelated to the practice of law is a net gain for attorneys with physical disabilities, and it's simply unfair and irrational to expect legal employers to treat those with disabilities as equals much like it would be unfair to criticize a big law firm for not considering Jewish attorneys in the 1940's when no one would have considered them during that period. The question is how much of a hit to net earnings should a lawyer take on the basis of a purely physical disability, and realism requires us to state some hit is necessary but it should not be an automatic disqualification if it has no impact on productivity.

The wheelchair is merely an example, but it would be foolish to say someone in that situation should be judged based solely on their competence and performance as that has never been the reality. I think it's both fair and only rational to expect some level of downgrading, and it's more a question of what level is fair and acceptable. Traditional notions of fairness are impractical, and I think anyone in that position would agree simply not being disqualified for partnership or the like on that basis constitutes a significant gain. Another variable that may be difficult for anyone who has not been subject to discrimination to fully understand is that if you produce value that another attorney cannot, there is less motivation to produce it for someone who treats you as relatively equal because they have to than someone who treats you that way on their own accord. That is the reason both I and as I'd imagine many similarly situated persons would consider things others would not, but as others have indicated implicitly, there is a limit.

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Re: Two Year Non-Compete Agreement

Postby sucsuroc » Fri Jun 14, 2019 11:44 am

icansortofmath wrote:I’d seriously ask about fast tracking you to partner and you’re willing to sign non compete as part of partnership agreement.

I had one professor that tried the same thing and failed. He lateralled to a midlaw as partner instead.

If you’re as valuable as you claim and as your employer seems to think, you must have some way to extract some of that value.


You (and apparently your professor) should read Rule 5.6. A noncompete as part of a law firm partnership agreement is clearly unethical.



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