Non-disclosure agreements

My workplace has given all of the employees a non-compete/non disclosure contract.  Basically it states that if separated by any means, the employee cannot obtain employment in the field they are working at for a period of two years.  I take that as if someone is laid off they cannot gain employment in their profession for the period of two years.

We were given from this contract, a sum of $50.00 consideration if we sign.  If we do not sign, we are fired.  This company has been in business for 20+ years and now implemented that. 

I am worried that a lay off in impending and they did this so we can't find employment in our field for two years.

Anyone know of any recourse?  Can the employer seriously dictate where we can work if separated for the period of two years? 

And here's the truth.  They are trying to take away your right to work.  Unless they want to pay you your full pay for two years after a separation, this is entirely unenforceable. One of the values of hiring experienced workers is getting the benefit of their previous knowledge and experience.  I've seen a few companies require the signature, but I've never heard of a company actually doing much to enforce it.

About the only case where it might be enforceable at all would be if you stole a customer list from your current company and used it to try to get new customers for a new place you work.
 

Part of the "contract" states that for a period of two years, upon separation from the current employer, all employees must submit in writing their new employer's name and position held.

This contract doesn't harm me specifically, I can always find a job in customer service.  It does, however, prohibit me from working at a competitor.

I am concerned for my co-workers.  No one wants to sign it.  Many have been at this profession for years and I know of two who refused to sign it. 

I am trying to research that if I refuse to sign such document, would that disallow me from unemployment?  Sadly, we were not allowed to seek outside input...sign by Monday or your fired.

Seeing as its illegal for them to say anything bad about you to other employers, I dont see how they really could hold anything against you. They cant physically stop you from going wherever you want and applying. And they cant force you to submit in writing your new employer. And if the new employer calls them, they cant say anything more about you than that you worked there.

I can't seem to find case law regard an unfavorable reference in Ohio.  According to their contract, they can sue us and we will be responsible for attorney fees.

I have never been put in this situation.  I am thinking they want to lay people off but don't want any "trade" skills to be taken.  I have an ACE up my sleeve though. 
 

From what I've just read,

1. It's questionable as to whether they can actually fire you with no consequences for not signing. If you decide not to sign and they fire you, you can bring a wrongful termination suit, especially if they didn't offer you an adequate incentive to sign, and $50 is paltry compared to a career of experience. This is based on a quick google of case law for other at-will states like Ohio.

2. I agree with Mr. Blanche. Even if you do sign, you lose your job or they fire you and you seek employment in your field, it's HIGHLY unlikely the court will side with the contract. Two years is ridiculous IMO. Did they include the geographical area of the enforcement of the contract, or does it not specify? A lot of non-compete agreements are dismissed for being too broad.


Basically you're just going to have to decide how much you like the job. I would hire a lawyer just for advice on this if I were you.

Minka said:

Seeing as its illegal for them to say anything bad about you to other employers, I dont see how they really could hold anything against you. And if the new employer calls them, they cant say anything more about you than that you worked there.

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Not exactly true.  If they have paperwork proving their statements, they can (and should) give any new prospective employer negative information about you.  For example, if you were disciplined for not following company rules, you are confronted and required to sign an acknowledgment (this is the common practice), you'd be hard-pressed to claim any sort of harm by having that information passed on.  To put it in my own field, if a driver is fired for showing up to work with alcohol on his breath, or if he fails a drug test, you certainly want that information to go to a new employer.

Most companies these days give hire date, termination date, and whether the employee is eligible for re-hire.

But non-compete clauses are often nothing more than pro-active intimidation.  No employer in his right mind would try to keep you from going to work in your field, unless he's willing to pay you your full pay for the length of the disclosure.  Any other attitude would be considered theft by any court you went to.  Beware of arbitration, however. 

If, however, you disclosed some secret or patented process, that might be covered under theft of intellectual property or industrial espionage.

However (and this is really important to understand), if you were hired without signing any such agreement, and the employer then tries to coerce you into signing, he's on very shaky ground.

To put it in terms most ladies here would understand, in Texas, women have very strong protections in a marriage and community property.  Your prospective husband might want you to sign a prenuptial agreement, and you might sign it, but if you subsequently get divorced, there are good odds the judge will throw that agreement out, believing it is essentially an effort by your husband to get you to sign away the very rights the Texas constitution gave you, and for the very reasons it gave them to you. 

Texas is a right-to-work state, and all employment in the state is "at will."  That means you can be fired for anything, and you can quit at any time, and you can go to work for whoever you want to.  But we still have a pretty active labor board that takes a very dim view of unfair practices.

zohdee said:

My workplace has given all of the employees a non-compete/non disclosure contract.  Basically it states that if separated by any means, the employee cannot obtain employment in the field they are working at for a period of two years.  I take that as if someone is laid off they cannot gain employment in their profession for the period of two years.

We were given from this contract, a sum of $50.00 consideration if we sign.  If we do not sign, we are fired.  This company has been in business for 20+ years and now implemented that. 

I am worried that a lay off in impending and they did this so we can't find employment in our field for two years.

Anyone know of any recourse?  Can the employer seriously dictate where we can work if separated for the period of two years? 

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Call a lawyer and seek legal advice.  You are entitled to a FREE 15 minute consultation.

If you leave your place of employment, or are fired or let go for whatever reason, they CANNOT prevent you from earning an income in the area that you are experienced in.

It's amazing how many companies try to bully people into signing something like that.  A "non-disclosure" is one thing, but a "non-compete" that prevents you from working is a totally different matter.

It may be too late to to respond but in general (and unfortunately) this is legal for your employer to do. 

Here are some links that you may find helpful. I also looked at a little case law and pretty much all of it resolved in favor of the employer. 

https://www.ohiobar.org/ForPublic/Resources/LawYouCanUse/Pages/LawYouCanUse-357.aspx

http://www.myemploymentlawyer.com/non-compete-covenant-FAQs.htm

Your best argument if there is ever a violation is that the one they are asking you to sign is too broad (that it prohibits you from working anywhere). But, even if it is, the Court would likely just re-phrase it. Rarely will they invalidate the whole provision.

Non competes are very enforceable and most of the time the employee loses and pays big. And, since you are in an at-will State, they can legally fire you for refusing to sign. 

I'm so sorry you are in this situation. I hope you were able to make a decision you were comfortable with. Please let us know what happens!

I'm sorry you are in this situation My boyfriend was telling me the other day that his company had employees sign non-competes, I believe when they bought out the other company he worked for. He didn't sign one, but many have.

What a crappy situation to be in..

I would consult a lawyer in your area for a free consultation before you sign anything. So sorry you're in that type of situation hun!

mrblanche said:

To put it in terms most ladies here would understand, in Texas, women have very strong protections in a marriage and community property.  Your prospective husband might want you to sign a prenuptial agreement, and you might sign it, but if you subsequently get divorced, there are good odds the judge will throw that agreement out, believing it is essentially an effort by your husband to get you to sign away the very rights the Texas constitution gave you, and for the very reasons it gave them to you. 

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Ummmmmm......So women here would only understand marriage, divorce, and prenups? :dk: :lol3: Give us a little more credit than that.


Zohdee, that agreement is a bit over the top. My husband is a computer engineer and also had to sign a non-disclosure agreement. His stated he could not go work for a competitor for one year if he were the one that left the company, not in the case of a layoff. I hope it all works out. :cross:

AbbysMom said:

mrblanche said:

To put it in terms most ladies here would understand, in Texas, women have very strong protections in a marriage and community property.  Your prospective husband might want you to sign a prenuptial agreement, and you might sign it, but if you subsequently get divorced, there are good odds the judge will throw that agreement out, believing it is essentially an effort by your husband to get you to sign away the very rights the Texas constitution gave you, and for the very reasons it gave them to you. 

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Ummmmmm......So women here would only understand marriage, divorce, and prenups? :dk: :lol3: Give us a little more credit than that.

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Yeah. Didn't want to start an argument in a non-IMO thread, but that was fairly insulting. I'm sure you didn't mean it though.

Is-it-in-writing,that-if-you-don't-sign-it,you-are-fired?Or-did-they-just-tell-you-that?

I-would-tell-them-that-you-are-not-going-to-sign-any-legal-document-until-your-lawyer-has-read-it.If-they-try-to-threaten-you-to-sign-it,with-being-fired,if-you-don't,I-would-tend-to-think-you-would-have-grounds-for-a-lawsuit.

I-agree-with-the-others,consult-a-labor-attorney-or-call-the-labor-board-in-your-state.Best-of-luck.

p.s.look-in-the-yellow-pages,under-lawyers,they-are-listed,by-areas-of-expertise,look-for-the-ones-under-labor.

l'm with the poster who said to consult a lawyer.

l work for an American company here in Canada. When l was hired, l signed the same thing, except for 6 months rather than 2 years. Failure to sign would have meant l could not be hired.

Mine does not state that l cannot work in a similar field, but that l cannot work for our direct competition. There is only one other same-field company in our city, and their technology is not the same - l know a couple of ex-employees who now work there. 

speakhandsforme said:

Yeah. Didn't want to start an argument in a non-IMO thread, but that was fairly insulting. I'm sure you didn't mean it though.

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My point was an example that comes up much more often than a non-compete agreement would.  Sorry if it sounded insulting.  I was just showing that something that is a common practice doesn't actually hold up under legal scrutiny.

Another example we're probably all familiar with is the statement on the ticket for a parking garage or the work order of a car service facility that says, "Not responsible for loss or damage to vehicle."  Lawyers call that "Pre-emptive intimidation with empty threats."  A dealership is definitely responsible for your car while it's in their care.  If the place burns down with your car in it, rest assured their insurance is going to pay for it.

I tried to find an example in Texas of a non-compete clause being successfully litigated.  With my limited resources, I didn't find a single one reported.

mrblance-is-right,its-the-same-at-horse-shows,they-make-you-sign-a-paper-that-says,they-are-not-responsible-for-your-horse-or-equipment.We-in-the-horse-world,know-its-not-worth,the-paper-its-written-on,LOL.

He-is-also-right-about-the-prenup-thing,LOL,many-a-big-star-or-big-money-person's-lawyer-have-"broken"-the-prenup-signed.

Katie-Holmes-father-is-an-attorney,he-drew-up-a-contract-that-was-5-boxes,when-he-helped-her-with-her-divorce-from-Tom-Cruise.So,if-contracts-were-so-iron-clad,LOL,it-wouldn't-have-taken-5-boxes-of-legal-papers,LOL.

As-far-as-Texas,we-don't-bother-with-lawyers,we-just-shoot,from-the-hip,drag-the-body-in-the-house,call-the-cops,who-say,have-a-good-day.Look-it-up,LOL,or,ask-JR-Ewing.

We had two people not sign and they were let go.  I had no choice but to sign it because I am a single mom and can't survive on unemployment. 
 

I wonder how that would work in the UK?. We don't have NDA's where l work, but we have Employment Law that the company pays several thousands of £££ for each year, but it's there not only for the employer but for the employee, so unless it was something really bad we can't just let them go, we have to go through several procedures

I'm curious how we would handle that here now?

mrblanche said:

My point was an example that comes up much more often than a non-compete agreement would.  Sorry if it sounded insulting.  I was just showing that something that is a common practice doesn't actually hold up under legal scrutiny.

Another example we're probably all familiar with is the statement on the ticket for a parking garage or the work order of a car service facility that says, "Not responsible for loss or damage to vehicle."  Lawyers call that "Pre-emptive intimidation with empty threats."  A dealership is definitely responsible for your car while it's in their care.  If the place burns down with your car in it, rest assured their insurance is going to pay for it.

I tried to find an example in Texas of a non-compete clause being successfully litigated.  With my limited resources, I didn't find a single one reported.

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You can't compare the enforcement of a prenup and the enforcement of a non compete- the tests for enforcement are very different. 

Sadly, most states are at-will employment states and absolutely favor the employer. One case I found out of Ohio said the basis of the non compete was valid (3 years within a 75 mile range). And, it was valid even though it was signed after the person had started working. And, that they would have had grounds for termination for failure to sign. The ONLY reason it wasn't upheld is because the company had been sold and the non compete did not transfer to the new owners. They would have had to draft a new contract.