Re: LAW: (long) enforceability of noncompete agreements

[Elna Tymes <etymes -at- LTS -dot- COM>]

John Gough wrote:
>
> 1. Do not accept noncompete clauses in contracts.
>    If you don't want to abide by a stated noncompete clause,
>    scratch through it on the employment agreement and initial it.
>    If your employer won't accept the modified contract, consider
>    working elsewhere.

You probably wouldn't be hired by most companies in Silicon Valley,
then.  Noncompete agreements are standard around here - but they specify
that you aren't to go to work for this company's clients or for
companies who have parallel products.  If you want to be a contractor in
Silicon Valley, I don't know of a single agency that doesn't have a
non-compete clause, and they simply won't deal with you if you decline
to sign it.
>
> 2. To sue successfully for violation, a company usually has to
>    demonstrate material loss, *depending on the state laws*
>    where you did business with the company.  If you find yourself
>    being pursued by a company, one of the best defenses is to write
>    (or have a lawyer write) a rejection of their claim of contract
>    violation, citing state law and evidence that you do not
>    fit under the law.  This may prevent the company from suing
>    (since they see that you know the law and are prepared to defend
>    yourself) and at least kick it to mediation.

And the cost of having a lawyer write that - and let's face it, the
power in this is getting a lawyer to use letterhead stationery to make
your case before filing anything - can be substantial, depending on who
you're fighting.

In addition, people at agencies tend to move around a lot - and usually
take their databases with them, despite the agencies' attempts to
prevent that.  Which means that if you stiff one agency, the people
associated with that agency NOW will remember you six months from now
when they see you at another agency.  You sure you want to burn that
bridge?

There's some current what-amounts-to-history in California being written
by the settlements between Informix and Oracle, and between several
other sets of companies involved in this area.  One company recently
lost just such a suit and its president has been found guilty and is
facing jail time and a fine.  As you said, this area is quickly
developing and it pays to pay attention. What's so in Texas appears to
be not so in California.

Elna Tymes
Los Trancos Systems

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