You may have signed a non-compete agreement. This is an agreement that precludes you from seeking employment with another company for a period of time. After signing this agreement, you may feel trapped.
You probably are wondering if there is any way around this agreement. Non-compete lawyers can help guide you.
To get around a non-compete, you need to know that you are breaking a contract. You also need to understand what that means. When you break a contract, your employer can go after you for:
The best way around this type of agreement is to understand what happens if you decide to break it and what your employer might do in response.
The Lacy Employment Law Firm is here to help guide you through these questions and advise you on a solution. If you have already broken your agreement, we can help by providing you with representation.
We will help prove that your non-compete is enforceable or that your employer is not entitled to any damages from its restrictive covenant (non-compete agreement).
Getting out of a non-compete is not easy. Non-compete agreements are clauses in contracts. And contract law differs from other areas of law.
This is because by signing a contract you are agreeing to terms you had a chance to review. When you attempt to get out of this agreement, you are essentially breaking a promise.
The basic definition of a contract is “a promise for a promise with consideration.” That means that one party promises to do something. The other party also promises to do something. And one party is getting something of value for the exchange of promises.
In the cases of non-compete agreements, one party promises not to work in the same field for a period of time. The other party promises work and compensation.
Under contract law, when a party breaks a promise, the other party is entitled to damages. Getting out of a non-compete agreement requires employees to essentially break their promise.
The good news, however, is that contract law is the one area that actually anticipates employees breaking their promises.
The first potential way out is the easy way. You can always just ask your former employer to waive your non-compete. Under contract law, a party is free to do so.
You may have been a great employee. Sometimes employers do not want to incur ill will,especially if they will not lose anything if you break your non-compete agreement. Keeping an employee that does not want to be at a company is not a great business move.
Also, the company may hope that you will spread goodwill after you leave. Perhaps they do not want to be perceived as unfair.
Of course, there is always the possibility that they will fire you if you suggest breaking your non-compete agreement. Figuring out whether your non-compete clause would remain in place would require legal advice from a non-compete attorney.
The other way out of a non-compete is the hard way. There is a reason for the expression “contracts are meant to be broken.” You can get out of a non-compete agreement by breaching your employment contract.
You can’t break your non-compete agreement without consequences. There is a chance that your former employer might consider it more trouble than it’s worth to enforce the agreement against you. But you should be prepared for the consequences.
Most times, your former employer wants injunctive relief. Injunctive relief allows your former employer to ask the court to prevent you from working at your new employer.
The typical reason that an employer asks you to sign a non-compete is because you know or will learn something valuable. This could be a customer list. It could be a trade secret. Or maybe you will learn confidential information in your employment.
The employer will have to show that they need the non-compete agreement to protect a legitimate business interest.
That’s the way you break a non-compete agreement.
After your former employer sues you, if you can show that no business interest would be protected by the non-compete agreement, you can get out of it.
If your non-compete only protects against normal competition, then you have a good chance of getting around it.
The employer’s second remedy is money damages. Money damages counts as any money that your employer lost because you broke your employment agreement.
These are less likely to occur and sometimes difficult to prove. The bad news is that if your former employer wins, you could be on the hook to pay your employer back.
The good news is that the amount that your employer can take from you is only equal to the amount of money that your employer lost because you broke your employment agreement.
In this area of law, many employers have advocated for the measure of damages being the profits that you made by leaving the company early. This would punish the employee for leaving.
Under contract law, the goal is to put both parties back in the position they would have been in had no breach occurred.
In this case, let’s say you decide to break your non-compete. You leave Google to go to Apple. Apple promises you a hefty signing bonus, and you stand to make more money at Apple than you would have at Google.
You might consider making the jump in this case. The best-case scenario is that you leave, your employer does not pursue your non-compete, and you sign a deal with Apple with no non-compete agreement.
The next best outcome is that your signing bonus and salary exceeds your employer’s losses. Basically, in this case, if your employer did pursue you, you’d have more than enough money to pay your former employer back.
In this situation, everyone wins. The law doesn’t care because, essentially, no harm, no foul.
You may have guessed the worst situation. You go to your next job, and it does not pay you enough to cover your employer’s lost profits. You are then sued. You lose and you have to pay your employer damages.
Now, practically speaking, employers may not actually go after you. Going to court costs money. If you’re not a very high-level employee, you may not be worth pursuing to your former employer. And the employer will have a hard time proving that you caused them to lose out on profit.
This is not to say that you should just break your non-compete agreement. There is still risk. And if you are considering breaking your contract, you should contact a lawyer.
Employer’s will do what’s necessary to protect their interests. You should do the same.
The next way to get around your non-compete clause is by proving that it is unenforceable. You should always seek the advice of a lawyer. But in this case, especially, you are likely to need one.
If your employer does not care about the money, they might file an injunction against you, meaning that you would not be allowed to start work at your next job.
An employer can attempt to enforce a non-compete agreement because you know trade secrets. But if you then misappropriate, or share, the trade secret, you have now committed a tort.
That is, a wrong that could cause your former employer harm.
And, in some cases, this is now a federal crime.
A tort means that you committed a civil wrong. In criminal cases, the punishment is money. In civil tort cases the punishment is also monetary.
Tort law differs from contract law in its purpose. Contract law aims to put the parties in the same position they would have been in had they not entered the contract. Tort law, however, seeks to compensate an injured party for a wrong.
And, sometimes, it also seeks to punish and deter future unlawful acts.
The basics of a trade secret are that:
Essentially, you cannot use the information that you learned at your previous employer to make money with someone else.
Imagine you work for Coca-cola. Then you go over to Pepsi and use this secret formula to make their drink taste better.
In this case, you have taken a trade secret to a new employer and capitalized on it.
Trade secret cases often arise when the idea is considered more valuable than the person. This means that the company really values what you learned at your previous employer.
It is less concerned with your actual skills than with the knowledge that you gained while working for them.
The knowledge of trade secrets also sometimes arises by accident. It is hard to just “forget” what you learned from a previous company.
The best way to defend a claim for misappropriation is to show that you only used your own or public information, not information that belonged to your employer.
If you can show that you never used any of your employer’s information, you win. You can use your own documents, records, etc. to help prove that you developed the secret with your own knowledge.
Further, showing that the secret was not actually a secret but rather was public information can also prevent a misappropriation claim. You can use books, the internet, articles, patents, etc.
Another defense is that your employer did not keep the information secret. Remember, the first step for an employer is to prove that the trade secret is confidential. If the employer gave the information to someone else, then the information is not truly confidential.
Since we are no longer dealing with contract law, your employer can seek greater damages. Under tort trade secret law, you might be on the hook for:
Misappropriating a trade secret ups the ante. Remember, contracts are made to be broken. You might come out of a breach of contract situation ahead. Or at least in a financial position that’s sufferable.
If you misappropriate a trade secret, your employer is more likely to come after you. People come and go from a company. But employers do what it takes to keep their secrets.
Getting around a non-compete clause requires breaking a contract. You are breaking a promise that you gave to your employer.
Although contracts are routinely broken, understanding the consequences of breaking a contract is important. A non-compete lawyer can advise you on those consequences.
You can contact us –we provide guidance on these issues. We are here to help before you decide to breach your employment contract and after your employer decides to do something about it.
Are you currently unhappy at work? Is a better opportunity just on the horizon? Is your non-compete agreement holding you back?
What are you going to do about it?
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