[vh2013]

Hi everyone,

I am new to the forum, so hope that everyone can help me on this issue. I am graduating this December and had an offer at my intern place in summer. I just got my employment contract last week to review before I actually sign on my start-date which is Jan 2. Really excited to start but one of the terms in the contract bugged me is the non-compete agreement. The term restricts me from working for any projective competitors/clients of the firm 2 years after my termination. Within the restrictive period, if i want to continue working in the accounting field, I need to find a job that is 50miles radius away from the firm’s main office. I really do not know what to do as I am fresh out of college and starting my career. I do not know if the agreement is enforceable. I really appreciate if anyone can give me any advice/insight how I should response for this situation.

Thanks a lot

vh2013

[ihatestudying]

Im not sure about this..not to compete clasues are common, but i think usually meant for stealing clients away from the firm, etc…. but if you were terminated or quit and went to work for another firm, that should be ok…but liek i said, im not sure if this is standard. i definitely wouldnt sign it until someone who knows gives you some advice. so hold off until you get an explanation.

hopefully you get some better help on here then i could provide

AUD - 2/27/12 - 76
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[Anonymous]

Absolutely postively DO NOT SIGN THAT agreement.

First, I am not an attorney but noncompete clauses must be fair and reasonable to be enforceable. The 2 year agreement doesn't bother me as much as the 50 mile radius does. If that were in the metro Atlanta area where I live, that prevents me from working anywhere as most jobs are in the metro areas.

Second, any company that would be that restrictive is not somewhere I would want to work. It sounds like something out of a John Grisham novel.

This agreement will hurt your career. Whether it is enforceable isn't the point, it's the point that they could hinder job opportunities as other employers may be leery of being sued or your employment causing them grief. You could sign it and then end up getting a dream offer elsewhere. It's one of those things where you could be right and spend a lot of money via lawyers fighting.

No way in HECK would I sign that agreement. No how, no way.

[Anonymous]

Noncompete clauses need to be reasonable and fair.

That's the most one-sided agreement that I have ever seen. Why not just banish you from the State while they are at it. I could see such an agreement if you were signing up for a franchise of a McDonalds or something where they don't want you to take territory away.

But to banish you from working in Accounting at all for 2 years within 50 miles of their home office. Haeck now. They'd have to guarantee me a $1,000,000 salary before I would sign such an agreement. They are basically hamstrining you and making it all but impossible to leave, ever.

I would submit a guess that this company is offering a substandard salary to a newcomer where they recognize potential but also know it's a soft job market. I signed an agreement that simply made me work a year at a company for them paying my college expenses….it was the worst year of my LIFE. They were an awful company and I couldn't get out of there fast enough.

There are tons of jobs out there, go find another one.

[vh2013]

Thanks for all your advice, especially CPA pending. I also thought the same way too. One of my profs at school advised me to talk to them to not sign the agreement, but I doubt it. I am meeting with them tomorrow to talk this out. But really do not know how to handle it properly.

[Anonymous]

Just be matter of fact. Tell them that you are not signing the agreement because it is entirely too restrictive. I woudl tell them that you are willing to sign a 1 year agreement not to go to a direct competitor but that you are not willing to sign anything regarding the client or general Accounting agreement.

This isn't an all or none situation. There are other jobs out there and basically this company is attempting to limit your ability to use your experience gained by providing them benefit. No how no way.

If it were me, I would simply say “thank you for the offer but I will be declining the offer based on the unreasonable nature of the noncompete clause. The noncompete clause is entirely one sided and overly restrictive and I will not restrict my ability to work in Accounting for two years upon leaving the company”.

Remember, it's not always you that decides to leave. Let's suppose you get a horrible boss who decides to fire you. Not only have they taken away your livelihood but they've taken away your ability get employment elsewhere using your experience. Most employers ask if you are under a noncompete when hiring. This will be disasterous for your career. Again, I have serious doubts as to whether this is even enforceable but hiring lawyers to fight it out when you are unemployed (at your doing or theirs) is not something you will likely be able to do.

What a bunch of schmucks.

[Noct]

I'm not an attorney, so take this for what it's worth, but it is my understanding that in contract law, you can modify the contract in any way you see fit prior to signing it. It is then up to the issuer if they will accept your modifications. I would cross out that clause and sign the document (assuming you have no other objections) and return the signed/modified contract.

FAR - 79 - 07/2012
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Material: Wiley books

[musicamor]

Good points posted here. I would definitely say that ball is in your court right now–you have the upper hand. Do not make any hasty decisions and debate with them before signing, or, like Noct said, make modifications to the contract, sign it, and see if they will accept your modifications. If they accepte them, you're good to go. If not, politely decline while stating the exact reasons why you are declining the offer. There are other jobs out there.

Texas CPA - licensed in 2012!!!

[subie_rex]

I could be wrong but I believe any modification to agreement of a contract associated with employment will lead to a rejection of the original employment offer and a communication of a counteroffer which could drop the job offer off the table.

Granted, with this type of restriction it sounds kind of like a crappy place to work and you may want to reject this offer-haha.

You're a recent college graduate and will be working on your CPA..your pretty marketable. I would suggest potentially declining this job, but that's just me.

BEC-86 (07/07/12)
FAR-87(08/25/12)
AUD-93(10/08/12)
REG-87(11/17/12)

[Anonymous]

I wouldn't sign that. I understand the non-compete clause – we have a version of our own where we cannot work for a direct client within a year of working for our Big 4 firm. I can even understand the 2 year window because they do not want you to be familiar with the audit if you were to work for a client.

The 50 mile radius however is absurd. I don't think there should be ANY radius on where you can or cannot work.

I would talk to them about the clause – and personally there is no way would I agree to the 50 mile radius piece. Plus as others have said non-compete needs to be reasonable to be enforced, and 50 miles is no way reasonable.

Good luck!

[vh2013]

Hi everyone,

First and foremost, thanks so much for all of your thoughtful advice.

I talked to them today. They said regardless of the positions, signing a non-compete is an exchange for the employment (they said they expect me to grow within the firm, so even entry level do have to sign) . They also said the non-compete clause limits employees to work with any direct competitors. But when I asked them to give me an example, they just said that any companies that have finance/accounting outsourcing and within the DC area. One point that they made is I can do tax, audit since the company does not offer these service. But i find it is hard that there is not likely that a company only offer one type of service.

They said in the case employees are involuntarily terminated by the firm. Employees might get severance pay depending on the circumstance that the firm decides reasonably.

I also talked to a former employee who was a senior accountant of the firm. That employee was sued recently and was enjoined for 9 months from conducting any accounting services. He also said that the firm has tried to go after other employees who quit as well but not sure if they really enforce like in his case.

So should I decline this offer? It seems to make me uncomfortable signing it knowing that they would go after and sue me if I decide to leave the firm.

In case I decline the offer, how should I response to them?

Once again, I really appreciate for all of your advice. And I find this forum is really helpful cuz its not only give me good advice but help me release a lot of stress.

[mrwills12]

I wouldnt take the offer, it doesnt make much sense, basically if you do accept, you are saying that you only will work for this company for the rest of your life or you are going to move to a job 50 miles away. Once you sign and accept the position you have no leverage left, the employer can pay you whatever the heck they feel like paying because you cant quit to go to a better paying job because they will sue and bar you from any accounting position for 2 years.

Dont put yourself in that situation there has to be other offers out there. You were able to get this offer you can get other ones as well. I know these are desperate times but accepting this position could really hurt you in the future. What happens if you dont like the firm? or want to change to an industry job in a year or 2. The non compete clause doesnt sound like it is very reasonable. I had to sign one where i work, but that stated that i could not take clients away from the firm when i change jobs.

Tell them that you dont find their non compete clause very reasonable and you are looking out for your long term future and politely decline their offer. That is what i would do.

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Using Becker Self Study 2012

[ihatestudying]

decline it….tellt hem thank you for the opportunity but i am not comfortable guaranteeing my services here for the rest of my career. If you would like to make me an offer without this clause, I will be interested.

AUD - 2/27/12 - 76
REG - 5/31/12 - 78
BEC - 8/31/12 - 77
FAR - 12/6/12 - 76

[Anonymous]

My understanding is that you are not required to sign the non-compete agreement. You can accept the job offer, but decline to sign the non-compete.

[Anonymous]

“I also talked to a former employee who was a senior accountant of the firm. That employee was sued recently and was enjoined for 9 months from conducting any accounting services. He also said that the firm has tried to go after other employees who quit as well but not sure if they really enforce like in his case.”

I'd politely decline the offer.

[Anonymous]

OMG, I know you are young and inexperienced so let me be the voice of reason.

1st….if employees are involuntarily terminated they MIGHT be given severance at the discretion of the company. Uh no thanks.

2nd….this company has shown a desire to go after people who dare quit. How much time, money and worry did these previous employees endure while fighting them? How many other job offers were lost because the would be new employer couldn't wait or wouldn't wait to see the outcome of a lawsuit?

I know you are young and think that you are going to miss something if you don't take this sure thing.

If you were my child, I'd kidnap you and take your phone, blackberry, computer and any other communication means away. I'd lock you in a closet until this company went away.

Believe me, I have been there working for companies who knew they had the upper hand. Universally, they treat the employees like crap.

Even if this company came back and gave you the option of not signing, I'd leave. Arrogance like this spills over from noncompete agreements to policies, etc.

To give you an example. The company who paid for a small portion of my college expenses had it over on me because I signed an agreement just guaranteeing a year's service for it. I endured the worst year of treatment as an employee I have ever been given. I was a professional and required to clock in and out. One day I came in and above the timeclock was an industry article about how ‘no one is irreplaceable and how we should not feel as though we're special'. I left on day 1 of the second year.

You are headed towards heartache. I don't know how to better express it. Do not work for this company for any reason. RUN RUN AWAY.

[Author]

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