Advice when resigning and you have an active non-compete agreement
If you have decided to resign from your job, but have already signed a non-compete, it is important that before acting, you consult a legal expert and have considered all implications. Here is some advice to help.
Do
- obtain copies of the agreements you have signed
- consider obtaining legal advice before you leave
- develop an exit strategy
- attempt to get another job before leaving the current one
Don't
- assume that the non-compete is unenforceable
- download any emails or documents from your company-owned devices
- plan a dramatic exit
- forget to ask the right questions
Do obtain copies of the agreements you have signed
If you did not keep copies of the documents you signed when you joined the company, you typically can obtain copies of those documents from the human resources department. You will want to ensure that you have fully executed copies of all agreements to review. The timing of this request is important. Once you seek out these documents from the company, you are tipping your hand that you are contemplating a move and that it might be to a competitor. If you did not keep copies of these documents, then it would be better to wait until you are interviewing or close to getting an offer before you seek these documents from the company in case a decision is made to terminate the employment relationship before you are ready.
Do consider obtaining legal advice before you leave
If you have a non-compete agreement and wish to make an employment change, it is very important to obtain legal advice about the terms and scope of your non-compete agreement before commencing interviews. If you have already begun interviewing, then obtain advice before accepting a job offer and/or terminating your current employment. You may be asked, during interviews or upon receipt of an offer, if you have a non-compete agreement. Before you respond to such a question, it is important to get advice from a lawyer. The biggest mistake employees make is waiting too long to seek advice. Also, ensure you are getting advice from a lawyer experienced with non-compete agreements. There are nuances in the laws regarding these agreements and you will want to speak to an attorney who regularly handles legal issues relating to non-compete agreements.
Do develop an exit strategy
It is never a good idea to start sending resumes out or accepting interviews before you have developed a clear and concise strategy for when and how you want to leave. Take some time to put your thoughts in writing (not on the company computer). You may also want to consider discussing your strategy with your legal counsel.
Do attempt to get another job before leaving the current one
It is always a smart idea to obtain your next job before leaving the current one. Have an actual start date negotiated with your new employer before you speak to your current employer. If you leave your current employment before you actually have a job, you may risk not having a job at all. This is a good topic to discuss with your legal counsel if you have any question at all whether your new job is confirmed before ending your current employment relationship.
Do not assume that the non-compete is unenforceable
Do not believe your friends and colleagues who may try to convince you that non-compete agreements are “worthless.” Many people continue to believe, wrongly, that non-compete agreements are difficult to enforce. In reality, most non-compete agreements can be and will be enforced by employers, at least to some extent. There is no one who can guarantee you that any non-compete agreement will be easily discredited or “thrown out of court.” In fact, non-competes are getting easier to enforce not more difficult although the myth persists that these agreements are garbage.
Do not download any emails or documents from your company-owned devices
Your employer may already suspect that you are planning an exit and may be watching your corporate computer use, as they likely have a right to do. Many companies will log into a current or former employee’s account to view the employee’s activities. For example, employers will look at emails to see if the employee communicated inappropriately with company customers. Employers are generally able to see what you have deleted or accessed within a certain (relatively long) period of time with ease. Just because you think you have deleted an email, that email is not likely deleted from the company’s system. Many times, employers gather information from a current or former employee’s computer or email account, which illustrates what the employee has viewed on the system or on the internet; what the employee has downloaded; what the employee has printed; what the employee has emailed to an outside personal email account; what the employee has uploaded to a flash drive or external hard drive; what the employee has uploaded to a cloud; etc. You get the idea. If there is anything you have on your computer of a personal nature, you can usually work with your employer to obtain that information after you have ended your employment relationship.
Do not plan a dramatic exit
As tempting as it may be, do not start a “fire” on the way out the door. You do not want to burn bridges, as angry as you may be when you leave. Do not trash your employer to your colleagues. Do not call customers and disparage your employer. Do not send out a scathing email “to all” or post a Facebook message about how great you are and how awful the employer is. The employer has more money than you and is almost always willing to use it to discourage future similar behavior.
Do not forget to ask the right questions
It is important to note that every non-compete agreement is different. Below are a few questions you should ask your attorney if you are faced with the decision to leave your job when you have signed a non-compete.
- What state laws will apply to my agreement? Is there a statute or set of statutes that govern the enforceability of my non-compete agreement?
- Is my agreement governed by an arbitration clause or will the matter be decided in a court of law?
- Is there a “blue pencil” law or practice whereby judges or arbitrators will rewrite the non-compete in order to make it enforceable under state law?
- Do you believe a judge or arbitrator would revise my non-compete agreement? If so, in what way do you believe it would be revised?
- Was I given sufficient consideration in exchange for my agreement to enter into the non-compete? The consideration allegedly received by you is an area to analyze in detail. For example, if the alleged consideration to you was the receipt of confidential information, ask your attorney whether this element of a contract was met and if any information you may have received was truly confidential.
- Is the time limitation in my non-compete reasonable?
- Is the geographic limitation in my non-compete reasonable?
- Is the non-compete reasonably tied to the company’s legitimate interests in restraining competition or is it punitive in nature?
- Do I have an obligation to advise potential employers that I signed a non-compete agreement with my current employer?
- What recourse would my current employer have if I leave to join a competitor?
Summary
If you are certain that you want to leave a job despite the present non-compete, it is important to follow a plan of action. The safest choice is to obtain advice from a lawyer who has experience working with non-compete agreements, in order to ensure that you are aware of all details.
