[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

[sbruce810]

I agree with everything that CPApending said. Personally, I don't know how you remained composed during the meeting with the firm. If a prospective employer tried to feed me that much BS I would laugh in their face and walk out.

AUD - Passed
BEC - Passed
FAR - Passed
REG - Passed

Done

[jelly]

Involuntarily terminated – it's called federal and state unemployment benefits, and the rest of your accrued unpaid PTO (vacation and sick days). I'd get the exact severance amount and time in writing.

The 50 mile provision makes no sense. What happens if you move 51 miles away, and then they open up another office right next to your new pad, the next day?

If this contract is going to be that restrictive, I'd demand some $ before signing anything:

2 years of no work for competitors= then there better be 2 years of paid salary + health benefits waiting for you if you are voluntarily or involuntarily separated

50 mile radius restriction = then they pay for you to move 50+ miles away, plus 2 years pay

I hope there are other (job) options for you. I've walked away from signing a release when I separated from a company, b/c the employer refused to pre-sign my work experience hours. Nothing happened other than not receiving the consideration pay. It pissed off the employer, who I was never going to use as a reference anyway.

Couldn't pass again!

[Anonymous]

You are getting pretty good advice here.

To be enforceable, a non-compete clause must be reasonable with respect to length of time, type of work, and geographic area. The general rule found in the Restatement is: Covenants not to compete are reasonable if they restrict the employee from competing with his employer within such territory and during such time as may be reasonably necessary for the protection of the employer without imposing undue hardship on the employee.

A clause that prohibits you from working in the financial sector for 10 years anywhere east of the Mississippi River is quite obviously unenforceable.

However, something like what you described, 2 years, 50 mile radius, and a rather narrow type of work, could be enforceable.

It is certainly a close enough case that if your prospective employer chose to pursue the matter, they would have a pretty good chance of success and you would be in a difficult spot. Lots of employers elect not to do this because they want to avoid a reputation as litigious with regard to their employees (tough to attract talent when you tend to sue that talent if things go badly). It sounds as if this firm has no such concerns.

Some states, like California, refuse to enforce those provisions because of public policy reasons. If you really want to work there, consult an attorney in your area about the law in your jurisdiction regarding these clauses. My guess is that you will find the clause might very well be upheld.

Unless they are paying you a lot more than any other offer you may have, I would pass on working for such a firm.

[mrwills12]

I dont think the question is can it be enforced. I think at least from what the OP has said, the company already has gone after his friend and sued him and successfully won.. (His friend was barred for 9 months) . It is quite obvious that the company can enforce this non compete clause based on past examples the OP cited.

FAR - 88 (Jul 2012)
AUD - 85 (Oct 2012)
BEC - 82 (Nov 2012)
REG - 92 (Jan 2013) DONE!

Using Becker Self Study 2012

[kgirl]

If you accept their offer and later they try to enforce the non-compete agreement on you, there's going to be problems. Even if you wind up in court and it's ruled that the non-compete is unenforceable, you will likely have spent your hard-earned cash on legal fees for an attorney to fight it for you.

This is just my opinion but this very rigorous non-compete agreement is a huge red flag. It doesn't seem reasonable at all. If I read correctly, you can't go to work for any prospetive clients of theirs for 2 years? Depending on how they expand their service lines, that could eliminate a lot of potential employers for you.

And ITA with PP who wrote likely they'll be extremely miserable to work for. I'd advise you to turn it down. I wouldn't focus on how enforceable it is but instead focus on the tried to enforce the agreement with a former employee. They've shown enough about how they operate. Run fast and far from them.

[RedskinsCPA]

I see you are in the DC area, as I am. If your home office is in Virginia then it is a “right to work state”. That contract cannot stop you for working for a competitor in a Virginia but does obviously set limits on stealing clients/work from your past employer.

Googling “right to work” to see what laws your state has should help.

BEC - Pass
REG - Pass
AUD - Pass
FAR - Pass

[Anonymous]

I wouldn't want to work for that company at all, especially after finding out they have gone after past employees. I would politely decline the offer, and be honest that you're declining because you are uncomfortable signing the non-compete clause. I'm surprised they can get people in the door with that clause in the contract. Not worth it IMO.

[FAR74]

That is not the kind of company I want to work for, EVER. I had to sign one a few years back, but it really talked about stealing client data, i.e. opening shop right next door and using their clients…. I quit, and work at a Big 4. No problems, they were very nice about it too.

But if they have a history of going after people who quit.. I would run as far away as possible.

aud: pass
reg: pass
bec: pass
far: pass

[Author]

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