After several years on the job, Kathy Welton was asked to sign a non-compete agreement by her employer that barred her from working for anyone else in her industry for three years. But before time ran out for her to sign it, she got a new and better job.
“Yet I signed a non-compete clause in my new job even before I started,” said Welton, an editor and publisher based in Chicago.
The difference in the non-compete contract she signed in her next job was a big one: There was no mention whatsoever of her not working in her profession.
“Very clearly what I work on the company owns and I approve of that,” said Welton. “But putting a time limit on working in my field takes away my ability to earn a living in a profession I’ve been in for 22 years.”
A non-compete clause in an employment contract prevents an employee who leaves from working in the same field for a specified time frame and geographical area.
Advocates of non-compete clauses–mostly employers and their lawyers–say they are needed to protect their clients and secrets. Yet, workers say, these contracts make it almost impossible to get another job.
Non-compete clauses used to be rare, focusing on a few industries, such as advertising. But recently I’ve been getting an increasing number of protests from people in a variety of professions, including–to my surprise–engineers, particularly computer engineers. They were forced to sign to get the job and now feel stuck.
But are they?
More Top Picks Best Underseat Subwoofers For Cars
“You may be able to get out of it,” said Carl Khalil, founder of Internet Legal Freedom, an Internet provider of legal information at breakyournoncompete.com.
Khalil, a corporate attorney in Virginia Beach, Va., started his Web site last June “after deciding the playing field isn’t level because employers with unlimited resources have access to lawyers who handle these cases all the time.”
So the attorney decided to “scour the ends of the earth to find every possible defense, put it all at one site and offer it at a low price.” His price: $49. The site getsabout 4,000 hits a month.
“When you have blanket prohibitions of not working in your field, then there is a greater likelihood that the restriction is too broad and may not be enforceable,” Khalil said.
Take the case of Cesar Ajuria. “Ajuria, a computer programmer, signed a one-year non-compete clause with Software Systems Inc., not to work anywhere else in the country,” said the attorney.
“He went to another technology firm and was sued by his previous employer. Last year, the Texas State Court of Appeals ruled the nationwide limitation was too wide and unenforceable.”
Citing other recent court decisions, Khalil provides some “outs”:
“If you’re fired, sometimes you can get out of the contract,” he said. “And many states rule if the employer has been involved in illegal conduct, you can use that as a defense. It’s called `unclean hands.'”
Another way out might be if your previous employer breached the employment contract, such as failing to pay you the proper wage and overtime, or if you were classified as a salary worker when you should have been hourly and paid for overtime.
And I know a sure way to avoid the trap of non-compete contracts: Don’t sign them in the first place.
———-
Carol Kleiman’s column also appears in Tuesday’s Business section. Watch her Career Coach segments Sunday and Tuesday mornings on CLTV.
Send e-mail to [email protected].