Can an employer make you sign a non-compete and then lay you off immediately after?

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Can an employer make you sign a non-compete and then lay you off immediately after?

My company was bought by a local business man, so we had to fill out all the necessary paperwork of a new employee. Well, I had to sign a “No Competition and Arbitration Agreement”. But right after I turned it in to my supervisor, he let me know that my position had been eliminated. I was with the company 11 years and now I will be sued if I try and find work in the same area. Doesn’t seem fair to me. That’s all I know. How will I survive? If they laid me off, that contract shouldn’t matter right?

Asked on September 20, 2010 under Employment Labor Law, Ohio

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

You should definitely consult with an attorney; there are several possible things that might release you from the agreement or at least limit it:

1) You need to look at the exact terms of the agreement; many times they specifically only apply if its the employee terminates the relationship, not the employer.

2) There might be a failure of consideration, if you were laid off immediately--e.g. you did not get anything (any continuation of employment) in return for signing.

3) From what you right, it's not impossible there was fraud in the creation of the agreement (e.g. it was represented to you that you'd still be working there in some way), which would invalidate it.

4) Noncompetes are only ever enforceable to the degree they are reasonable in terms of geographic scope and time.


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