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  1. #1

    Default Covenant not to compete

    My husband works for a computer consulting company. One of their clients recently asked my husband if he would like to accept a position there as their IT person. Regardless they are planning on hiring someone full time rather than paying my husband's current employer any longer because it would be cheaper for them to just hire someone.

    My husband did sign a non-compete agreement when he accepted employment at the consulting firm. I don't know if this would be considered competing, or whether it just applies if my husband starts his own business or works for another computer consulting firm, which in this case he would be doing neither. Here is the text of the agreement:

    "Acceptance of this position constitutes my understanding and agreement to restrict my practice of computer consulting, in the event that my employment with Employer is terminated, withdrawn, resigned, or results in disqualification, to an area outside of a twenty mile radius extending from any office of Employer presently existing or established in the future. This restriction shall endure for three years from the date of termination, disqualification, resignation, or withdrawal; whether initiated for reasons of my own or the Employer's. This restriction applies not only to any office Employee may seek to establish within the restricted area for my own practice, but to any employment, either as an employee or independent contractor of any companies located in the identified area. For purposes of this agreement, computer consulting is defined as computer repair, computer software repair, computer hardware repair, computer sales, computer service, computer consultation, computer network design, computer installation and service, computer upgrades, computer software and computer hardware consulting and installation and computer training services."

  2. #2
    Join Date
    Mar 2005
    Location
    Michigan
    Posts
    28,906

    Default Re: Covenant not to compete

    In what state?

  3. #3

    Default Re: Covenant not to compete

    Is the company outside the 20 mile radius? If not, the agreement is probably enforceable unless your state has other precedent. Anyway, it is not good to burn bridges, the new job might not work out.

  4. #4

    Default Re: Covenant not to compete

    It is in Pennsylvania, and yes the company is within 20 miles. It's just not very clear whether it means any IT job whatsoever, which seems kind of over-broad, or if it means a job with a company whos business is to do the same thing as his current employer. This company is not a computer company in any way, and they need someone to take care of their network.

  5. #5
    Join Date
    Mar 2005
    Location
    Michigan
    Posts
    28,906

    Default Re: Covenant not to compete

    Pennsylvania's Supreme Court has written,
    Quote Quoting Hess v. Gebhard & Co., 570 Pa. 148; 808 A.2d 912 (2002)
    In determining whether to enforce a non-competition covenant, this Court requires the application of a balancing test whereby the court balances the employer's protectible business interests against the interest of the employee in earning a living in his or her chosen profession, trade or occupation, and then balances the result against the interest of the public. Sidco [Paper Co. v. Aaron, 465 Pa. 586, 351 A.2d 250 (Pa. 1976)].

    Fundamental, then, to any enforcement determination is the threshold assessment that there is a legitimate interest of the employer to be protected as a condition precedent to the validity of a covenant not to compete. Generally, interests that can be protected through covenants include trade secrets, confidential information, good will, and unique or extraordinary skills. Morgan's Home Equip., 136 A.2d at 846. If the covenant is inserted into the agreement for some other purpose, as for example, eliminating or repressing competition or to keep the employee from competing so that the employer can gain an economic advantage, the covenant will not be enforced.
    From what you have stated, I think a decent argument can be made that the covenant doesn't advance a legitmate interest of the employer. Still, if you violate the covenant, there is a chance that the employer will attempt to enforce it through the courts - and a court will then decide whether or not the terms are reasonable. It may be possible for your husband to get his employer's permission to take the new job, although obviously some employers are much better than others about granting such permission.

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