How Do I Get Out Of My Noncompete Agreement?

Top 7 ways to overcome non-competitive restrictions

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Massachusetts Gov. Deval Patrick has recently announced that he supports efforts to make noncompete agreements unenforceable in Massachusetts. Patrick's Secretary of Housing and Economic Development, Gregory Bialecki, said this about noncompete agreements:

Non-competes stifle movement and inhibit competition and we do not want that. The evidence is clear-we are not seeing the kind of spin-offs and start-ups at the same rate that previously made Massachusetts an enviable model. Individual career growth is good for the Commonwealth: We encourage our talent to be creative, to be innovative, and to network with other talented people. Furthermore, we encourage employers to recruit talented people. However, we send a mixed message: providing the talent needed to support the kind of explosive growth we want in the innovation economy is considerably more difficult if employees are legally unable to move between jobs in the innovation economy.

He added that Massachusetts is losing talent to California, which already severely limits enforceability of noncompete agreements:

If Massachusetts is not able to create an environment that gives entrepreneurial talent a chance to thrive, then the most effective job creating companies may be pushed to grow to scale in states like California. In fact, we have heard examples of entrepreneurs at MIT who were advised to start their businesses outside of Massachusetts as a result of non-compete agreement laws. Non-competes stifle movement and inhibit competition and we do not want that. The evidence is clear-we are not seeing the kind of spin-offs and start-ups at the same rate that previously made Massachusetts an enviable model.

By far the most common question I get in my law practice is, "How do I get out of my noncompete agreement?" I wish I had a magic wand to make non-competition restrictions go away for employees once they leave their employer, but there's no easy way out of these agreements. Assuming you don't live in California or Massachusetts (if they do pass such a law), there are still some ways to overcome noncompete agreements.

Here are the top 7 ways to overcome non-competition restrictions in your employment agreement:
  1. No legitimate interest to protect: The state laws allowing certain non-competition provisions in contracts are an exception to antitrust laws, which prohibit agreements that limit competition. If the only reason your employer has for the noncompete agreement is to prevent competition, that's an antitrust violation and it is illegal. They must have a legitimate interest to protect, such as trade secrets.
  2. Publicly available information: If the information the employer claims they are trying to protect is available to the public, they'll have a hard time proving they have a legitimate interest in protecting the information if you want to work for a competitor. Examples of ways information may be publicly available include lists available for purchase, searchable databases that anyone can pay to access, phone books (does anyone have them anymore?), search engines, and subscriber services.
  3. Employer breaches: If the contract also says the employer has to pay you certain wages, benefits or bonuses, lists your job duties or contains other employer obligations and the employer changes them or doesn't comply, then their breach may be a defense to enforcement of the noncompete agreement.
  4. Employer doesn't keep the information confidential: I've seen employers wrongfully try to claim their customers were secret when they proudly announced them on their web page, literally broadcast their customer names, or got them through bidding. If the information is really a trade secret, then the employer will have to prove they've taken steps to protect the information.
  5. Customer follows: It varies from state to state, but in some states a customer can voluntarily follow you to your new job as long as you don't solicit them to do so. If you send an email blast to all your customers when you leave, that may be a solicitation. But if the customer says that they are going to cease doing business with your former employer no matter what, it will be difficult for a court to rule that the company has a legitimate interest in keeping them from following you.
  6. Unclean hands: Most times, an employer who seeks to enforce non-competition restrictions will ask the judge to enter an injunction to stop you from working. An injunction is a kind of court order that is part of the court's equitable powers. In order to seek relief in equity, the employer must have "clean hands," meaning they didn't do anything wrong. If you left due to discrimination, illegal activities of the employer, or were retaliated against for taking Family and Medical Leave, you may convince a judge that your former employer has unclean hands and isn't entitled to an injunction.
  7. No damages: If the former employer sues you for money damages, they must be able to prove that any damages they seek were caused by your violation of the noncompete. This is more difficult than you might think. They'd need to show that, but for your violation, the customer would have given the business to them instead of you. If the customer testifies that they were unhappy or just went with the lowest bid, then damages will be impossible to prove.
While most people can't afford to fight noncompete agreements, if you have the money and the will to stand up for yourself, there are many defenses available to you. Don't let your former employer bully you out of a good job if you have the resources to fight your non-competition restrictions.

If you need legal advice, it's best to talk to an employment lawyer in your state, but if you have general legal issues you want me to discuss publicly here, whether about discrimination, working conditions, employment contracts, medical leave, or other employment law issues, you can ask me at AOL Jobs. While I can't answer every question here, your question might be featured in one of my columns, or in our upcoming live video chat.

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bman

I sent this story to Governor Brian Sandoval (R)l of Nevada, my state, in a hopes he'll also consider changing the rules here. Nevada is the MOST aggressive state when it comes to non-competes. In fact, it was the first state to allow prosecution of non-competes in court. It continues to hinder this state from real growth.

November 05 2013 at 4:40 PM Report abuse +1 rate up rate down Reply
Adam

They should stand up in court. I own a business. If I hire someone, train them, educate them, license them and pay them and then they think theyre going to walk away and open a competing business thats not going to happen. They can work in this field or industry. They CANT go after my clienbts, my referral sources, or own a competing business for a period of one year.

November 05 2013 at 4:37 PM Report abuse rate up rate down Reply
1 reply to Adam's comment
erinrhorn

Absolutely 100 percent agree with you Adam. I own a business too. I spend a lot of time and money training an employee. I sure as hell am not training them to take my trade secrets and processes that I invented and developed to benefit a competing business forget it. I have a two year agreement from my attorney as well as a geography radius as well. If you don't want to sign a non compete, do not sign it and find another job.

November 05 2013 at 5:32 PM Report abuse rate up rate down Reply
Billy Batts

I was a resident in Oregon and worked in Washington State with my Non-Compete. I left and got an attorney and they said that most of the Non-Compete was not enforceable in Oregon as long as I didn't directly solicit my ex-employers customers. I gave my partner my customer list and that was that.

November 05 2013 at 3:38 PM Report abuse +1 rate up rate down Reply
christa.blanchard

How about taking responsibility for your actions. Nobody forced you to sign the agreement.

November 05 2013 at 12:11 PM Report abuse rate up rate down Reply
2 replies to christa.blanchard's comment
Barnaby S Smithfield

you\'re a dumb sum beetch aint ya
it says if the company isn\'t holding to its responsibilities then you can get out...it doesn\'t say...ah I just want out so I get out
stupid friggin people have no comprehension of what they read

November 05 2013 at 2:07 PM Report abuse +1 rate up rate down Reply
bman

A growling belly and a wet head will get anyone to sign anything.

November 05 2013 at 4:41 PM Report abuse rate up rate down Reply

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