CAN A NON compete clause be enforceable if i am laid off?

My company send to me and all my coworkers a letter terminating our contract but also said we can’t apply other job with similar service unless is after 6 months. The problem I don’t want to wait 6 months to apply. I have bills to pay and I want to apply to the new company who has the same service than my old company. They said will sue us if we apply with the competitor company? What do I do? Even if we go to court, do you think I have a chance to win?

Asked on September 6, 2017 under Employment Labor Law, Washington


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

IF you did not receive anything other than your job (or continued employment) for signing the non-compete, then you are not bound by the agreement. A non-compete is a contract; like any other contract, to be enforceable, there must be an exchange of "consideration," or things or promises of value. In the typicial noncompete, the employee gives the employer a promise to not compete; the employer's consideration, on the the hand, is employment. If the employment takes away employment without good cause (without the employee doing something very wrong, like violating employer policy or manager instructions, insubordination, etc.), then the employer has failed to provide consideration, and the failure of consideration makes the non-compete unenforceable. So in a typical lay-off situation (losing the job through no fault of your own), you are not bound by the non-compete.
The situation is different if you received something else (a payment, a bonus, stock or stock options, etc.) for signing the non-compete; in that case, you received independent consideration for the agreeement to not compete, and so it is enforceable.

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