When I started my current job I had to sign a non-compete agreement. My questions are:
1.) I realize that the legality of non-competes vary from state to state, anybody know where I can check to see if they are legal in TN?
2.) If it is legal, am I bound by it if I move to another state where they are NOT legal?
3.) The contract which I had to sign to get the job (not witnessed and notarized to my knowledge) has a couple of elements in it which may not be legal, if so, does that invalidate the entire contract or not?
I can’t answer your state to state questions, but about your third inquiry, if anything in the contract calls for anything that is illegal, it is invalid, and you are not binded to it. Also, on a sidenote, the fact that it was not witnessed or notarized has no bearing on the validity of it.
FWIW, my Pops is in Sales, before he was self-employed he always had to sign non-competes. They were never upheld. This is because a contract cannot bar you from employment, which is essentially what a non-compete is designed to do. Now this is a while ago, and lawyers find slicker ways to do things all of the time, so YMMV.
Non Competes are designed to keep you from hurting your business.
I have had non comopetes thrust on me and have negotiated it down.
First I only signed if I QUIT would I non compete. I had it written that firing or letting me go before my 2 week notice was up invalidated it.
I also tied it into a severence plan. If I didn’t get paid my sick and vacation days in full with a severence I wasn’t bound by it.
If the company was sold to another owner it was invalidated it.
Finally if I could not find employment within 4 months after leaving I could compete.
Mind you however, intellectual property you develope WHILE working for your employer generally remains the property of your employer regardless of an existance of a non compete contract.
For instance I have written Excel and Access and Crystal reports that are used company wide. After I go I can’t take these with me NOR deny their use to my employer.
These are NOT unreasonable modifications. If your potential employer WON’T agree to it they probably won’t be worth much.
One interesting note. In Illinois the courts have ruled AGAINST employees who are on unemployment and have non competes if a job comes open in direct compitition.
In this case the unemployment agency sent this person on a job and he couldn’t work there as it would have been in violation of a non compete. The court ruled regardless, the man was UNAVAILABLE for work and COULD be denied benefits.
IANAL. Non-compete clauses generally have failed legal muster here in Texas. That, of course means nothing in Tennessee.
The not witnessed and notarized part probably means next to nothing if that is your signature on the document. Many contracts I’ve seen include a clause to the effect that if some part of the contract is found to be legally invalid or requires one or more parties to perform in a manner that would cause them to violate laws, then that part of the contract is null and void, but the rest of the contract remains binding.
Best bet is to check with a Tennessee lawyer. Failing that, I’d suggest checking in the state digest under “Noncompetition Agreements”.
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The answer to this question is a resounding “maybe”, depending on your new domicile’s conflicts law and whether or not your contract has choice of law and choice of forum provisions, amongst other things.
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Absent a severance clause, a contract which is made void by conflict with the law is entirely void. However, a severance clause can alter this result. So the answer to this question is also a “maybe”.
As a general rule, noncompete agreements are viewed with disfavor, but most states will allow them with significant reservations.
I had to sign a non-competition clause which for a period prohibits me from opening an office in a near-ghost town so far off the beaten path that it take a five hour drive to get there despite my already being a two day drive from the provincial capital. It’s the strangest thing I’ve ever signed.