Is my non-compete agreement enforceable?
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Is my non-compete agreement enforceable?
I am a electrical computer engineer. I was promised a raise and then it was taken away because bad decisions made by management left them with a
lower amount of profit that they felt comfortable giving up the raise was
only a few thousand dollars more per year. I am not sure how long this company is going to be in business with the financial decisions being made. I
signed a non-compete agreement when another manager was in charge before everything started going sour. The agreement says that I am not allowed to work at a competing company for 6 months, however that would essentially leave me without a job until the end of that time because of the line of work I am in. I have had no special training at my company but I am one of the top level employees because of my education.
Asked on June 7, 2018 under Employment Labor Law, Idaho
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
Non-competition agreements are enforceable in your state (Idaho).
However, unless you received something like a bonus or stock, etc. for signing it, it will not be enforceable against you if you lose your job involuntarily (are terminated, laid off, company closes, etc.)--except when you received some payment or benefit specifically for signing, a noncompete only binds you if you voluntarily quit or resign.
The reason is, a noncompetition agreement is a contract. Contracts require an exchange of "consideration," or things or promises of value, to be enforcable. In the typical noncompete, you agree to not compete in exchange for employment--your job is the consideration you receive. But if the company or circumstances (e.g. a closure) take away your job, that also takes away the consideration you received in exchange for your promise to not compete. If you do not receive consideration, the agreement is not enforceable against you. That's why it's enforceable if you quit/resign: the company was still providing you consideration: you'd still have your job except that you decided to quit. You can't use your own actions to get out of your contractual obligations.
If you did get stock, a bonus, etc. for signing, that's different: then you received consideration independent or or in addition to your job, and so being terminated, laid off, etc. does not take away all consideration. In that event, they can still hold you to the agreement after letting you go.
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
Non-competition agreements are enforceable in your state (Idaho).
However, unless you received something like a bonus or stock, etc. for signing it, it will not be enforceable against you if you lose your job involuntarily (are terminated, laid off, company closes, etc.)--except when you received some payment or benefit specifically for signing, a noncompete only binds you if you voluntarily quit or resign.
The reason is, a noncompetition agreement is a contract. Contracts require an exchange of "consideration," or things or promises of value, to be enforcable. In the typical noncompete, you agree to not compete in exchange for employment--your job is the consideration you receive. But if the company or circumstances (e.g. a closure) take away your job, that also takes away the consideration you received in exchange for your promise to not compete. If you do not receive consideration, the agreement is not enforceable against you. That's why it's enforceable if you quit/resign: the company was still providing you consideration: you'd still have your job except that you decided to quit. You can't use your own actions to get out of your contractual obligations.
If you did get stock, a bonus, etc. for signing, that's different: then you received consideration independent or or in addition to your job, and so being terminated, laid off, etc. does not take away all consideration. In that event, they can still hold you to the agreement after letting you go.
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