Sure – but that’s why my hypo included privity of contract between JillCo and UTHE.
OP, I have no real idea whether under your specific fact pattern a court could order a company to fire someone.
If you’re curious, I am aware of at least one circumstance where a court can order a company to fire an employee. Essentially, the federal securities laws allow courts to order a broker-dealer to fire certain employees who have done certain bad things. It happened at least once.
Under the federal securities laws, the Securities and Exchange Commission can temporarily or permanently bar a person from being an “associated person of a broker or dealer” if the person violated the federal securities laws, committed fraud, was convicted of a felony, or did certain other bad things. See Exchange Act Sec. 15(b)(6)(A), 15 U.S.C. § 78o(b)(6)(a) and Exchange Act Sec. 15(b)(6)(B)(i), 15 USC 78o(6)(B)(i).
An “associated person of a broker or dealer” includes employees, officers, directors, and certain other people. See Exchange Act Sec. 3(a)(18), 15 U.S.C. § 78c(a)(18).*
Once person is barred from being an associated person of a broker-dealer, broker-dealers are also prohibited from allowing the barred person to become associated with them. Exchange Act Sec. 15(b)(6)(B)(ii), 15 USC 78o(6)(B)(ii).
So, if a broker-dealer hires an employee who is barred from associating with a broker-dealer, the SEC can sue the broker-dealer and seek an injunction to prevent them from continuing to violate the law. Exchange Act Sec. 21(d)(1), 16 USC 78u(d)(1). Such an injunction effectively forces the broker-dealer to fire the barred employee.
One court issued such an injunction, which prohibited a broker-dealer, Tuschner & Co., from continuing its association with a barred salesperson. See Zahareas, Tuschner & Co., and Euroamerican Securities v. SEC, 167 F.3d 396 (8th Cir. 1999) (appeal of a temporary injunction), and SEC v. Zahareas, Tuschner & Co., and Euroamerican Securities, 100 F.Supp.2d 1148 (granting a permanent injunction).
- This definition generally excludes people who do solely clerical or ministerial work for a broker or dealer but the exclusion for clerical or ministerial work doesn’t apply to the parts of the Exchange Act that prohibits a broker or dealer from associating with a barred person and vice versa. Basically, a broker-dealer can’t hire a barred person even to work in a clerical or ministerial capacity.
I should have also noted that the case I cited to above was reversed on other grounds-basically that the barred person was not an employee. If he had been an employee, the injunction barring his employment would have stood.
Interesting.
Lawyers can correct me if I’m wrong, but I believe as a practical matter judges can “sentence” people to virtually anything.
You see all sorts of cases in the media of people being forced by judges to walk around with embarrassing signs like “I am a thief/deadbeat dad/whatever”, or other original “sentences”. That doesn’t mean that the judge technically has the power to order those things, and they’re not written into any law. But - as I understand it - he can order a pretty long prison sentence, and if he gives the guy a choice of that or a couple of days with an embarrassing sign, the guy is going to pick the latter.
In that sense a judge can “order” a person to be fired based on his offering that up as a better alternative to another sentence that he does have the technical ability to order.
The original post specifically mentioned a civil case, where one person is suing another. Judges can only sentence someone to prison in a criminal case, where the State (or U.S.) is charging someone with a crime.
I believe though that non-compete clauses are unenforceable in some areas of the country, correct? (My dad had an issue with one here in PA where they were violating the law when he had to sign one – I can’t remember the exact details)
My understanding - a judge can only create an order where one is asked for. In a case between Bob and Acme Inc., his former employer, Acme can get an injunction(?) ordering Bob not to work / stop working for Reliable Inc. (or for anyone in the same business).
But unless they take Reliable to court, the judge cannot grant Acme an injunction or order that Reliable not hire Bob. And again, on what grounds? Reliable has never signed a contract with Acme saying they would not hire Bob. They are free to hire whomever they want. It’s Bob’s problem to determine if he is allowed to work for them and if he is not, take the appropriate action.
I recall some cases I read where Company A did sue Company B alleging it was taking advantage of trade secrets, or proprietary customer lists, or some such that an employee had brought over. But to win that, A would have to prove that it was happening, the information was in fact proprietary, etc. In that case, the injunction would be for B to stop using the information, and/or monetary damages, not “fire Bob”.
the catch with non-compete clauses (at least how I’ve read the law in Canada) is that they cannot be “overly broad”. They cannot stop the person from making a living, they can simply forbid him/her from taking and using very specialized information or skills to compete with a former employer.
The usual application is for sales-type information, to prevent an ex-employee poaching customers through inside knowledge of prices and services involved - since an important part of sales is knowing what pricing structures will work with what customers; or if someone is involved in, say, a complex computer project - so they’ve learned not only what they were working on, but picked up key information from others about the inner workings of a key corporate project.
For example, if you worked for Google tweaking their selection engine algorithm, figuring out the best answer to searches - they could bar you from working for or starting another search engine company doing the same thing for a year, maybe. They could not stop you from working on a fairly different project like say, self-driving cars; but if you went to work for perhaps Travelocity to help tweak searching flights and hotels - well, let the judge decide.
So if the non-compete clause means you have to change careers or move hundreds of miles, then usually a judge will void it completely as unconscionable. The usual logic is that the employer has such a lopsided advantage that they owe a duty to be fair. If they won’t let you earn a paycheque anywhere else, then they should be paying you. The example I read of a non-compete which was upheld, was to not open a competing dental practice within 10 miles in the next year -or was it two years? (i.e. you sold me the practice with patients, now don’t immediately open shop down the street and lure them all away)
So why would they? Why would they force something on the plaintiff that may be inconvenient?
No. They’re enforceable everywhere. Courts just generally won’t enforce them unless they are reasonable.
That’s a good point and I had overlooked it. Thanks.
That said, much of the discussion in this thread has been about non-civil cases, in which the State or US is charging someone. E.g. the discussions of Typhoid Mary, suspension of professional licenses, or broker-dealer cases.
All of those are civil cases, with the exception of licensure cases, which are typically administrative. Nobody is being charged with a crime; they are being charged with civil infractions. At least in the US context, any litigation that is not criminal in nature is a civil case so long as the forum is an Article III (or state constitution-equivalent) court. Administrative law is a third branch but administrative cases are heard by specialized tribunals. The fact that the state is a party is not determinative.
OK, but they’re the government suing in civil cases, not Company A versus Company B.
But different states have different statutes covering non-compete agreements, so as a matter of bright-line law (not opinion about ‘reasonableness’), some agreements are legal in one state but not another. Famously, California’s law restricted non-competes far more than Massachusetts’ (in other words, a Massachusetts contract could have more conditions on the employee than a California one).
And it would seem to me the government even there cannot so much order a company to fire an employee, but rather to say “if you continue to use this disqualified person, your company is subject to fines and/ or loses its license to operate in the regulated environment.” it’s still the company’s decision whether to fire the employee or not.
Right. Not that a company is likely to just ignore the regulator, but for instance it’s possible all the company has to do is properly train and certify the employee and they can get back into the restricted job. Or it’s also possible the company will transfer the employee out of the restricted job and into another one (company chef, or guy who wears the animal mascot costume at corporate events); it’s almost certainly not a regulator’s job to forbid that (Well, I guess assuming the suit isn’t about health code violations…)
But for things like negotiating this kind of outcome, regulatory agencies taking civil (and administrative) actions are usually more similar to criminal proceedings than to two-private-party civil suits – there’s the same kind of asymmetric plea-bargaining going on (except there’s even less reason for the ‘defendant’ to go to trial), and most likely all a judge is going to do is to OK a deal worked out by the regulator and company.