Does an Employer Error in a Non-Compete Agreement Render it Unenforceable
My question involves labor and employment law for the state of: Florida
I'm in sales and I have a non-compete with my former employer which I just left. The separation was somewhat mutual as the company is changing its business model and eliminating all staff in the position I had. As such it was not a firing, but more of a layoff.
The non-compete document has a section defining what is 'prohibited competition'. In this section it specifically says:
'Employee acknowledges and agrees that a business will be deemed competitive with the Company if it is in a business of providing enterprise mobile platforms (the "Field of Interest")"
The issue is that I have no idea what 'providing enterprise mobile platforms' is. From what I have been able to research, this statement refers to work in the tech sector, either providing software or development services for 'mobile platforms' (i.e. tablets, smartphones, etc.). While I do not want to divulge the nature of the work this company does, it in no way involves anything even tangentially related to 'mobile platforms' as I have been able to define it.
The company imports and sells a physical product. For the purpose of comparison let's say that this product is 'ceramic bricks from mexico' which are then installed in customers' locales. This clearly has nothing to do with 'enterprise mobile platforms'.
My question is: If this Non-Compete document was copied from a template, but this part (Field of Interest) was not changed and it is signed by both me and the employer, will the employer have legal recourse to prevent me from working in the same field I was working in with them (presumably the ACTUAL field of interest of this company) given that it's not spelled out in the document?
I guess what I'm really asking is: Will a court see this as a 'reasonable' mistake made by the employer and tell me: "you know what they really meant" or will they just tell the employer: "sorry...your screw up in a legal document is not the employee's fault"?
And by the way: I realize that this means I did not read this document closely enough when I first signed it. I mostly focused on the 'length of period of non-compete' more than anything else, but I definitely will use this as a learning experience for reading every thing in the future.
Re: Employer Error in Non-Compete Agreement and Its Enforceability
It's not how you define it that counts. It's how your employer defines it that counts. And without reading the entire non-compete agreement there is no way of knowing if taking that one sentence out of context gets you off the hook.
For example, if the agreement says don't compete against the company and then says selling widgets is deemed to be competing against the company, it still says don't compete against the company even if you eliminate the widget part. That's why who entire agreement has to be analyzed.
That being said, a contract that is ambiguous is generally construed against the person who wrote it where the other person had no option of negotiating terms.
What makes a non-compete so deadly is that nothing prevents a lawsuit from being handed to you and then you get to spend thousands arguing it in court.
Re: Employer Error in Non-Compete Agreement and Its Enforceability
I suggest that you take the agreement to an employment law attorney in your state for an opinion of just how well it will hold up. In general, what the courts try to do when analyzing a contract is determine what the parties intended when then entered into it. Since the business of providing enterprise mobile platforms is apparently nothing close to what your employer does that makes that part of the contract unclear — surely that is not what the two parties meant. The question then becomes what did they really mean? Perhaps some other part of the contract will make that clear. Or perhaps extrinsic evidence (evidence outside the terms of the contract itself) would make that clear. The employer is likely going to be the one that has to put up a stronger showing here to convince the court there is a good contract and that your next employment is barred by that contract because in most states contracts to compete are disfavored so the court might not give the employer much leeway.
Re: Employer Error in Non-Compete Agreement and Its Enforceability
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Taxing Matters
I suggest that you take the agreement to an employment law attorney in your state for an opinion of just how well it will hold up. In general, what the courts try to do when analyzing a contract is determine what the parties intended when then entered into it. Since the business of providing enterprise mobile platforms is apparently nothing close to what your employer does that makes that part of the contract unclear — surely that is not what the two parties meant. The question then becomes what did they really mean? Perhaps some other part of the contract will make that clear. Or perhaps extrinsic evidence (evidence outside the terms of the contract itself) would make that clear. The employer is likely going to be the one that has to put up a stronger showing here to convince the court there is a good contract and that your next employment is barred by that contract because in most states contracts to compete are disfavored so the court might not give the employer much leeway.
It also might be pertinent that he was laid off...that the company was eliminating all staff in the position he was in. That might make a judge tend to throw out a non compete entirely.
Re: Employer Error in Non-Compete Agreement and Its Enforceability
The fact that it was the company's decision to eliminate your job has a whole lot of benefit to you. Their choice - and you have a right to make a living. I doubt seriously if they can make this non-compete stand up in court. Of course we don't know the complete details. So that disables any of us from giving accurate info back to you.
It is not wise to sign a non-compete without reading it well. However vague non-competes often work against the companies that wish to enforce it, so many signing one that is vague and incorrect is a better option than making sure it specifically spells out accurate details.
I used to work for an employer who would electronically send out the non-competes to sign every year (huge corporation). The last one that was sent to me, I objected to because it included statements that required not only me, but that my immediate family would be bound to it. Since I have no legal right to prevent my grown children from working anywhere they wish, I did not wish to sign this. There was no one to call and speak to. The website allowed me click and agree to it but not to reject it. I replied to the entity that sent it, but received no response. A month later, reminding me I had yet to acknowledge it. It stated it was a condition of employment. I went to HR who suggested "just sign it, it's not a big deal", but I refused. A month later, another email. I forwarded it to HR and my boss, again stating my objections. The HR manager thought I was being silly, my boss agreed with me. So we waited it out and ignored subsequent emails. Eventfully the emails stopped after six months. I never did lose my job (quit a few years after that). They asked me to sign a non-compete when I resigned (different document at this time and more reasonable). I refused because there was no benefit to me (no severance, no benefit in jeopardy, etc.) and they couldn't stop me from leaving - it was my choice.
Re: Employer Error in Non-Compete Agreement and Its Enforceability
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llworking
It also might be pertinent that he was laid off...that the company was eliminating all staff in the position he was in. That might make a judge tend to throw out a non compete entirely.
Although I agree with this, I do want to just correct the terminology (and yes, I know if was the OP's usage first and you're just quoting). Technically, a layoff means that there is a real possibility of recall. He was not laid off - he was RIF'd. He WAS technically fired, but it's a firing due to a Reduction In Force and not due to any deficiency on his part. I know, I'm splitting hairs, but I'm hoping the OP will also see this and characterize what happened correctly when it comes to other employment. No, he doesn't have to use the word fired but he should use RIF rather than layoff.
Re: Employer Error in Non-Compete Agreement and Its Enforceability
Agreed with the other comments. NCA are very specific to the exact wording of the ENTIRE document and the very specific laws of the state involved. Any contract law issue (which this is) always involves taking the document(s) to a local contract law attorney who needs to read the document in it's entirety. I can say that most non-disclosure agreements (NDA) are legal and most NCA are problematic. Not necessarily illegal but there is such a fine line between a legal and not legal or not enforceable NCA that is really is "see an attorney" territory, even more so then most contracts. It is not uncommon to have different court decisions in the same jurisdiction apparently coming to opposite conclusions with similar facts. Any smart employer writes very tight, limited NCA. There is no certainty that these will be upheld by the court but loose, vague agreements are asking for trouble.
Re: Employer Error in Non-Compete Agreement and Its Enforceability
I mention this for the FYI of the OP. Florida statute 542.335 addresses the elements of an enforceable non-compete agreement.
http://www.leg.state.fl.us/Statutes/.../0542.335.html
Re: Employer Error in Non-Compete Agreement and Its Enforceability
To all who replied: Thank you for your feedback and advice. I think the takeaway here is that a lawyer should always give you the final word on this, but I will expand upon and clarify some points made in replies:
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It's not how you define it that counts. It's how your employer defines it that counts. And without reading the entire non-compete agreement there is no way of knowing if taking that one sentence out of context gets you off the hook.
You're right of course. What I meant to say is that if an employer has a section in the document specifically defining what constitutes competition and it says "any company that sells ice cream" they shouldn't legally be able to tell you later that what they really meant was "any company that manufactures airplanes". The definition of the competing industry should be clear and in this case I don't think anyone looking at this section would infer what the actual business of the company is. Lastly on this point, the rest of the document has nothing specifically outlining the actual business purpose or industry the company is in; therefore, this section would be the one indicating which employment is 'prohibited' during the period of non-compete.
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Since the business of providing enterprise mobile platforms is apparently nothing close to what your employer does that makes that part of the contract unclear — surely that is not what the two parties meant.
Agreed, it isn't...but...
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The question then becomes what did they really mean? Perhaps some other part of the contract will make that clear.
No. Nothing else in the contract makes any reference to this or specifically mentions what 'product' the company makes and sells.
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Or perhaps extrinsic evidence (evidence outside the terms of the contract itself) would make that clear.
Now here is where you hit the nail on the head...there is evidence outside the contract which indicates what the company business is, but then why bother with contracts at all if you can just walk into court and say "your honor, doesn't it make sense that I would get a laptop if they want me to work online?"
Somewhere in contracts law it must state that if it's not in the contract you're not bound by it....
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It also might be pertinent that he was laid off...that the company was eliminating all staff in the position he was in. That might make a judge tend to throw out a non compete entirely.
Definitely an intriguing point, but in the cases I've read on this subject I haven't seen that as a valid reason...
Also thank you for the link to the Florida statutes...I've been reading those exact sections when thinking about this. At the end of the day, I will have to determine if any new opportunity is worth challenging this. If so then an employment lawyer would be step one. I think a couple of hours of consultations should be able to give me the basis on which to base a decision.
Thanks all.
Re: Employer Error in Non-Compete Agreement and Its Enforceability
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axelrodgunarson
What I meant to say is that if an employer has a section in the document specifically defining what constitutes competition and it says "any company that sells ice cream" they shouldn't legally be able to tell you later that what they really meant was "any company that manufactures airplanes".
That's a good point. And if your non-compete was that clear cut you wouldn't have a problem. Yours isn't clear cut. I know how to define "ice cream" and I know how to define "airplane" but I have no idea what "enterprise mobile platforms" are. Do you?
For all I know it could be one of these:
https://www.homedepot.com/p/Jet-SLT-...0780/306126116
Or it could be software that you download for your phone.
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axelrodgunarson
Lastly on this point, the rest of the document has nothing specifically outlining the actual business purpose or industry the company is in; therefore, this section would be the one indicating which employment is 'prohibited' during the period of non-compete.
But you already know what business your employer is in so if there is something that says don't compete with the employer's business, that could be enough.
Anyway, as has already been said, the entire agreement has to be reviewed for its intent.
The wisest course of action is don't compete with your previous employer unless you get a written waiver of the non-compete agreement.
Re: Employer Error in Non-Compete Agreement and Its Enforceability
Thank you...and yes, I've already gotten references for two employment attorneys in my area which I'll be contacting tomorrow...so I'm definitely going the right way as the next step...all that being said:
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...if your non-compete was that clear cut you wouldn't have a problem. Yours isn't clear cut. I know how to define "ice cream" and I know how to define "airplane" but I have no idea what "enterprise mobile platforms" are. Do you?
No, I don't....but what I do know is that it isn't in any way, shape or form what the company does. If the document says I can't be involved with ice cream...I don't need to know what an unidentified object is...I just need to know it's not 'ice cream'...
Thanks all...