[Shruti]

Hello all,
I am new to the forum, so hope that someone can help me on this issue. Last week i got an offer from a small size public accounting firm and just got the employment agreement contract to review (before I actually sign on my start date today i.e. 08/13/2018). I am really very excited to start but one of the terms in the contract bugged me is the non-compete agreement. This is what it says “At the end of the Employment Period, by expiration or termination, the Employee may not engage, own, manage, control, operate, be employed by, participate in, or be connected with the ownership, management, operation, or control of a business similar to the type of business conducted by the Company for a period of 2 years and within 25 miles from the present location of the Company’s business.”
I am in Irving TX which is in the central part of Dallas-Fort Worth metroplex and 25 miles covers pretty much any public accounting firm that i can think of.
I really do not know what to do as I am fresh out of school(and recently cleared all my CPA papers) and starting my career. I really appreciate if anyone can give me any advice/insight how I should response to this situation. Is this a reasonable non-compete or what is a reasonable area that could be covered in a non-compete agreement?

Thanks a lot

[Asking for a Friend]

First, Congrats on the offer!
Without knowing details of your situation, that seems overly restrictive. I have met people that proudly state they never signed a non-compete – certainly easier for them to say later in their careers when they have leverage. In any event, if you have an offer they clearly like you and hopefully you have a reasonable rapport where there can be some open dialogue and express your concern in a polite way… I'm very excited about the opportunity and think it could be a great fit for my career – I don't anticipate leaving but am concerned at the insinuation that I couldn't perform accounting work in the Dallas area if I ever left…
At the very least hopefully they could come up with some less restrictive verbiage. They may make it seem like it's no big deal, but you're wise to treat it seriously. I know some people begin work and just ignore it unless HR/someone is hounding them and then you can have the conversation but I always prefer open dialogue. If they're serious about having you they should understand and if they're abrasive about it perhaps you're better off somewhere else to begin with.
If you have a friend in legal profession / law school you could bounce off them.
Good luck!

[Anonymous]

Non-compete clauses are rarely even enforceable. It's mostly nonsense. For someone coming fresh out of school, you're not a huge threat to an established company. If you decide to leave in 6 months and go work for someone else, there is nothing they can do about it. To try to sue you over a garbage non-compete clause would be absurd. I wouldn't worry about it, personally.

[Anonymous]

Ask yourself why they would put it in there in the first place. If they don’t plan on enforcing it, it’s coercive, if they do you’ll need a lawyer to challenge it’s enforceability.
Don’t let anyone tell you this is standard – your job is to show up and put in your best effort, not protect your employer from having to compete in the marketplace.

[Shruti]

Thank you SrBryan! I discussed my concerns about the non-compete and my supervisor was very understanding and assured me that they would be changing the non-compete to something more reasonable. thanks again!

[Shruti]

Thanks CPA2021!

[Author]

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