If you are getting laid off from work and they ask you to sign a form regarding refusal of work with another company, is this legal?

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If you are getting laid off from work and they ask you to sign a form regarding refusal of work with another company, is this legal?

“Employee promises not to seek employment or any other business relationship at any time in the future with [Company] or any of its parents or affiliates and she forsakes any right to be employed or to have any other business relationships in the future with [Company] or any of its parents of affiliates”.

Asked on February 12, 2011 under Employment Labor Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Someone can contract or agree to not seek future employment with certain businesses. However:

1) To be binding, there must be some consideration--i.e. you have to be given something in exchange for your promise or commitment. For example, you would have to receive severance beyond what you would normally or automatically receive for being laid off, without signing the agreement. Without consideration, there would be no contract. Furthermore, if you're not being given anything extra, why would you possibly choose to sign this?

2) It's possible  that based on circumstances, certain agreements of this type could be viewed as too broad and therefore would only be enforced to a  more limited degree. For example, if you are in a community where most employment is by or through this company, its parents, affiliates, etc., a court could conclude that what you gave up is broad it is not enforceable indefinitely, but only for some more limited time. This is unlikely, but possible.


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