[Anonymous]

The company that I work for has a fairly strict non-compete agreement. It states that for 2 years after the end of my employment here, I cannot work for any other entity who provides any accounting, payroll, bookkeeping, or tax servies to any former customers of my current employer. My boss (who is the owner) has said verbally that he wouldn’t enforce it for clients who seemed to have come and gone in the course of business (there’s always a few clients, especially tax return clients, that try out a new accountant), and as I have no intention to try to steal client lists, I suspect that I’m safe from any legal issues, despite the strict wording.

However, does anyone know how CPA ethics views non-competes? For example, if I were to work for another accountant at some point in time, and that accountant were to have a client – however small – that was a former client of my current employer, would working for the new employer in contradiction to the letter of the law of my non-compete count as a discreditable act worthy of disciplinary measures?

My impression is that, depending on the person reviewing the case, breaking the letter of the agreement could count as discreditable, and based on that, I’m seeking to modify the wording of the non-compete. However, my boss isn’t convinced that such a thing could cause me to lose my license. So, if anyone has a pretty clear answer one way or the other, I’d be thrilled to see it. If my boss is right, then I’m in the clear. I’m not going to violate the intent of the agreement (I won’t steal his clients or aid a new boss in doing so), and if the letter won’t matter for small issues, then I’m fine. If, though, I am right, then I need to find a solution for this, either having him change the wording or considering a career in private accounting (since it would be easy to make sure that I didn’t violate it in that situation!).

Or if anyone knows who would be the appropriate authority or the appropriate way to inquire about this. I’ve tried looking in the AICPA website and haven’t found anything, and my state (KY) doesn’t seem to have their own ethics rules…but I may try to contact one of these agencies (AICPA or state board) so that I can have a clear answer regarding whether or not my license or status would be jeopardized over this. (Well, that is assuming I pass the tests and have a license to jeopardize… 😉

[Anonymous]

…shameless self-bump, since this forum is so active that posts quickly get lost…. 😉

[wizards8507]

I would err on the side of caution and stick to the letter of the agreement for both ethical and legal reasons. Even if your boss has verbally assured you that he wouldn't enforce the agreement, there's no guarantee that he won't change his mind if you stepped on his toes. There's also a chance that another leader at the firm decided to enforce the agreement. They'd be well within their legal right to do so, as the verbal assurance your boss has given you is unenforceable.

NY CPA

[Anonymous]

I completely agree, and am trying to get him to make the written word match the verbal statement, because anything verbal is useless when it comes to legal matters! I'm just hoping to be able to show him written in stone (so to speak 😉 ) that even if he doesn't pursue legal action, this could still create problems for me. He's the sole owner/officer/anything of the company, so in his mind, if he wouldn't pursue this, then it doesn't matter…and due to the legal costs, he's sure that even if he was mad, he wouldn't pursue things unless I'd actually committed corporate espionage. In my mind, if it's signed and binding, then whatever was said verbally doesn't matter – I'm still liable. I'm just trying to find something to convince him that I'm liable. 😛

Thanks for the input though. I couldn't agree more!

[wizards8507]

I work in corporate accounting so I've never encountered these agreements in my career, but it sounds like it's fairly standard practice. In that case, just be forthcoming with any NEW employer during the interview process that hiring you comes with a restriction that places certain limitations on their client list. If these are standard agreements, your future employer should understand.

NY CPA

[Anonymous]

I have considered working in private/corporate accounting…and if nothing else, it would make matters like these much simpler! There's not many companies in my area that are large enough to employ a full-time accountant, let alone an accounting department, but I'm still keeping my eyes open for openings. This is the only non-compete contract that I have seen personally, so I don't know how standard mine is, but I can hope these restrictions are common if my next job is in public accounting!

If anyone else is curious about the AICPA's view on this topic, I emailed them, and this was their reply: “The Code of Professional Conduct is silent regarding the compliance with non-compete clauses. Such a contract would be merely between you and your employer. However, such a non-compete clause may have some legal implications. As such, you should consider discussing this matter with an attorney. You should also consider contacting your State Board of Accountancy to see whether the Board has any additional rules regarding the compliance of non-compete clauses.”

[jelly]

Some thoughts:

1) What's your state's law on this? For instance, it's 2 weeks in NY. I do some industry work for an organization where I need audit services, so I had no qualms reaching out to a manager who went to another firm; the old firm couldn't do anything to stop me/the organization or the manager after 2 weeks.

I have similar wording in a document where I work, and it's written much too vaguely to be enforceable.

2) I imagine it's harder in private industry b/c the company knowledge is so specific. For instance, if you work in legal or finance for pharmaceutical or tech companies, rivals would love to hire you b/c of the trade secrets you know.

Couldn't pass again!

[Author]

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