Can a non-compete agreement be enforced if your employer stops providing benefits as outlined in your offer letter?

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Can a non-compete agreement be enforced if your employer stops providing benefits as outlined in your offer letter?

I am looking to change employers due to the fact that my current employer has stopped paying my per-diem or paying for me to go home as promised in my offer of employment. In the offer I was to be paid a daily per-diem and be provided with travel home after 49 consecutive days. The employer states they can no longer afford to pay for this. I have not been home since for 7 months and want to change jobs. My non-compete agreement states I will not work for a competitor for 3 years after employment. I want to make sure that I will not violate my end after the employer changed the benefits outlined.

Asked on February 20, 2012 under Employment Labor Law, Alaska

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

1) The non-compete most likely can still be enforced against you. Even if you are no longer receiving all the compensation or benefits you had been, you are still employed; that continuing employment would most likely still be enough to make the agreement enforceable. (Employers may change compensation, including reducing pay, afte all.)

However, as noted, it is only "most likely" that the agreement is still  enforceable--if the offer letter to which you refer was sufficiently strong and detailed as to constitute an employment contract requiring you to receive certain compensation or benefits, then in that case, the employer's breach of its obligations would likely free you from your reciprocal obligations. Most offer letters do not, in fact, form enforceable contracts--however, it is possible that yours might. Therefore, you should bring the offer letter and the non-competition agreement to an employment law attorney, who can review them and the circumstances of your employment (including the circumstances under which you took the job) to see what your recourse is.

2) Also note that if the offer letter forms an enforceable contract, or if you relied on the employer's promises about a per diem, travel time, etc. in taking the job, and in so doing did something significant to your detriment (e.g. left a different job; relocated), then you may be able  to require your employer to continue honoring its promises. (Note--the legal theory for holding someone accountable to promises which you relied on to your detriment is call "promissory estoppel"; there are a number of different circumstances or criteria which must be fulfilled for promissory estoppel to apply, but your lawyer can review your situation against them.)

3) While non-competition agreements are enforceable, if they are too long or too broad in scope, courts may reduce them to a more reasonable level (called "blue penciling" them). For most non-senior-management employees, a year is usually about the limit for a non-compete, so the non-competition agreement you describe may be too long; it therefore may be subject to being judicially reduced if necessary. Your attorney can discuss this with you, too.


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