Re: LAW: (long) enforceability of noncompete agreements

[John Gough <gough -at- AUSTIN -dot- ASC -dot- SLB -dot- COM>]

Elna, you can easily say the same thing about noncompete
clauses in the markets I've worked in (TX and  NC).

1. What is the law in CA?
2. What are some cases in which the law has been enforced
      or shown to be unenforceable? Real citations please,
      in any area.
3. What are the cases in which the law has been enforced
      for a technical writer, as opposed to executives
      or key technical personnel?

The reason this issue is interesting at all is because technical
writers who work on contract run into the clause a lot. My question
is whether it is a legitimate restriction or a case of a companies
overzealously covering their butts and wanting to make contractors
pay the price of their paranoia.  It is my opinion that the clauses
constitute restraint of trade.

Why? They are telling me who I can and cannot get a job with. They
are not compensating me for holding me off the market.  I do not
consider direct control of my employability a reasonable compensation
for their fear that they will have a material loss from my working
for a competitor.

Most of employers' reasons cited for writing noncompete agreements
are covered by separate confidentiality clauses.  They are harder
to enforce...it's ever so much easier to make you promise not to
work for someone else:  your work record is easily verifiable.

Your claim that the noncompete is a "standard clause" is
correct. My point is that it should not be.  I bet if you
ran a survey in Silicon Valley, 80% of the technical writers
who have worked for three or more clients are in technical
violation of that clause.  Hey, the reason you are hirable
by one company may be your experience working for another
that is in the same market (OS's, databases, multimedia chips,
etc.)

From my previous (undocumented) post I got one email from someone
who knew a technical writer who was sued for violating a noncompete.
We aren't paying much attention to the clause now.  As professionals
with a vested interest in an open market we should be cautious about
what makes its way into "standard" contracts. BTW, there is no such
thing in law--there may be a legal concept of common and accepted
practice, but every contract and agreement stands on its own and
can be modified in any way agreeable to the participants.

Is this issue worth bothering about? Who knows. We don't see much
enforcement among our ranks.  What disturbs me is an increase in the
number of laws that favor employers' ability to control the work
environment *outside* of their own doors.  It makes the free market
less free.  Again, there are cases in which they are justified in
protecting their interests--my point is that existing confidentiality
laws cover them adequately, and noncompete clauses disturb the balance
between individual rights and employer's rights. Let employers pay
to solve their problems, not us.

I think the Informix/Oracle case you mention involved predatory
hiring practices--ex-employees who switched sides would help
recruit from their ex-employer.  That is a similar but distinct
legal issue.

John
============================================================
>John Gough wrote:
>>
>> 1. Do not accept noncompete clauses in contracts.

Elna Tymes wrote:
>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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