A regular part of my practice includes advising South Carolina employees about the content and legal impact of their non-compete agreements. These agreements, which I’ve blogged about before, will often include non-solicitation agreements and provisions related to confidential business information and trade secrets. The language of the agreements can be confusing, poorly worded, filled with legalese, and difficult to understand for many South Carolina employees. And employees can be confronted with the non-compete at different stages of employment, each stage of which can have different consequences. Which is where a non-compete consultation comes in.
Why Should I Schedule a Non-Compete Consultation?
In a prior post, I wrote generally about what an employee can do to better prepare for a employment-related consultation. Many of those same suggestions apply to a non-compete consult (documents to review, etc.). But the main thing to remember is that while the non-compete is a contract, the courts do tend to examine them far more closely than regular contracts. For example, if you pay some to paint your house for a certain amount, and the painter agrees, that’s a contract, whether written or oral. If you pay and the painter fails to do the work or botches the job, then that’s a breach of this simple contract.
But a non-compete is not merely a dispute over a payment of money. Rather, these agreements can literally prevent you from working in your town, county, state, or region, doing the same thing that you’ve spent your career doing. That restriction, if it were enforced, could be devastating to your livelihood and ability to provide for your family. You might have to sit out of work for a year, or do something else altogether in terms of job duties or geographic area. (And while there’s some effort at the federal level to limit or ban non-compete agreements altogether, any laws that would impact you are likely months or years away.)
Because the non-compete can cause so much trouble, the courts don’t like them, and judges are hesitant to enforce them unless they meet the specific requirements of the law. These specific requirements are the focus of a non-compete consultation.
Timing Matters
When an employee comes to me for a review of a non-compete agreement is often as important as what the agreement says. I most often meet with people (1) right before they sign the agreement at the start of a new job; (2) right before they plan to leave the job that is subject to the non-compete agreement; and (3) after the employee has left and has received either a cease and desist letter or been served with a lawsuit.
(1) If you have not yet signed the agreement, then you may have an opportunity to negotiate the details of the non-compete or non-solicit before you pull the trigger and enter into the agreement. Now, this is not always an option. Many employees, especially lower wage earners, may not have the leverage to negotiate anything related to the agreement and have to decide either to sign it “as is” or to walk away altogether. But to the extent an employee can push back against the proposed terms–hopefully by limiting the scope in terms of time and geographic area or in attempting to eliminate a non-compete altogether–then that negotiation should be pursued. Sometimes an employer may be willing to remove the non-compete and focus on a non-solicitation of customers instead. Mileage will vary, of course, depending on your negotiation leverage.
(2) If you’ve already signed an agreement and are ready to start looking for another job, then having your non-compete reviewed at that time by a non-compete lawyer can help provide guidance as to potential pitfalls that can occur during the transition process. During a consult, I will look at the enforceability of the agreement itself and determine how strong the non-compete is (in other words, how likely is it that a judge will enforce it?). We also review the other terms that can cause issues in transitioning to a new job, such as the provision related to Confidential Business Information or non-solicitation of fellow employees on your way out. And we can talk about strategies in helping to limit risk of being sued, such as providing notice, being scrupulously careful in the return of company information on the way out, and cooperation in the transition.
(3) If you’ve already left and have either received a nastygram from your former company’s lawyer or been the lucky recipient of a brand new just-for-you kind of lawsuit, then speaking with a South Carolina non-compete attorney immediately is extremely important. Often, these types of lawsuits are accompanied by a Motion for a Preliminary Injunction, where the company seeks a court order preventing the employee from engaging in certain activities during the lawsuit. Hearings for these motions can be scheduled within a matter of weeks, so procrastination is not recommended. If the matter has not yet reached a lawsuit and we’re still just dealing with a cease and desist letter, there’s still time to determine how best to address the situation without leading to the lawsuit stage. We can respond to letters, either to rebuff or counter the allegations leveled against you, the employee, or if appropriate, we can negotiate some resolution of the dispute.
Takeaways
Non-compete agreements should be taken seriously, as employers often attempt to enforce them against their employees. The resulting legal tussling can be expensive, time-consuming, and energy-draining for both sides, although more so for the employee. Seeking out a non-compete consultation with an experienced South Carolina non-compete lawyer can provide you with vital information and strategy for defending against the enforcement of these restrictive covenants.
