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View Diary: Company wants to be able to fire people and prevent them from getting new jobs (151 comments)

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  •  The new employer is often sued. (1+ / 0-)
    Recommended by:
    Ahianne

    The new employer need not be a party to the contract. Intentional interference with contractual relations (between the employee and the original employer) is a tort (where I practiced). This is actually how many of these cases end -- by putting the new employer on notice about the covenant.

    There are only three kinds of new employees:
    (1) ones whose talents are so generic as to be easily replaced;
    (2) ones who were privy to trade secret or confidential information and could legitimately be restrained for a reasonable time in a state that permits; and
    (3) ones who bring special and valuable talent but not confidential or otherwise protectable information.

    Generally, an employer faced with a presumptively reasonable covenant (not a crazy "you'll never work in this state again" one) will cut loose group 1, possibly bargain for group 2 if it has really clean hands, and litigate only for group 3. Occasionally, you'll have pissing matches where employers sue or defend based on competitive or personal fights that go beyond the particular case. Usually, though, when there is a free flow of labor -- a buyer's market, as now -- the new employer's economic interests don't lie in litigating, especially if it also requires such agreements. In my experience, the terms are frequently bargained down -- the time restrictions are lessened and perhaps the new employer pays something, much as they would to a headhunter.  

    •  Sort of (2+ / 0-)
      Recommended by:
      sfbob, Villanova Rhodes

      Suit is often threatened against the new employer, however, that doesn't mean that the new employer engages.

      In the case of a former employer of mine, I had hired someone who had previously signed such an agreement. When the coercion letter (the only accurate description) arrived, our lawyer told the new employee: "deal with this, or we'll have to let you go - oh, and btw, you may want to talk with this lawyer, who is versed in these issues."

      The threatened suit went away shortly thereafter.

      •  Yes, that's why I said they often end by (1+ / 0-)
        Recommended by:
        radical simplicity

        putting the new employer on notice. Suit is often not required, but I have been involved in several where suit was filed and went a round or two. IIRC, the ones that actually went to trial were employees who struck out on their own.

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