Help Wanted: Noncompete pact has limits

DEAR CARRIE: In 1987 I signed an employment agreement between myself and a corporation that included a three-year, noncompete clause. In 1995 I left the corporation to have a baby. Several months afterwards, I went back to work part-time but at a different company. When the employer I had signed the contract with heard I was working again, it made me an offer. I returned eight to 10 months after I originally left.

The company hasn't signed me to a new employment agreement since I returned. So can I assume the noncompete clause ceased in 1998? Or am I still subject to it now?

Here's another question: Since the corporation will be sold by the end of the year, does the agreement -- if still in effect -- cease after the sale, or does it carry over to the new owner? -- A Reader

DEAR READER: "You seem almost surely safe from enforcement of the agreement," said employment attorney Alan L. Sklover, senior partner at Sklover & Donath Llc, a Manhattan firm that represents employees. And he said you are safe for a variety of reasons.

First: "It is highly unlikely the wording of your noncompete agreement says that it is intended to cover later periods of renewed employment," said Sklover, who is the author of "Fired, Downsized or Laid Off: What your employer doesn't want you to know about how to fight back (Henry Holt & Co., 2000). "Almost all non-competes cover the time during employment and a specified period of time after the employment ends. In my 30 years of fighting noncompete agreements, I don't think I have ever seen a noncompete that covers later periods of renewed employment."

And he added, "It is most likely a judge would say, 'If the employer wanted to include later periods of renewed employment under the noncompete agreement, the time to do so was [when] it was negotiated and signed, way back in 1987, not 2011. Now it's too late for a second bite of the apple."

Here are some other reasons working in your favor. Courts are generally not fond of keeping people out of work, he said, and generally won't do so unless the employer's reasons seem fair and are necessary to protect important interests and unless they are accompanied by a promise to pay the employee while he or she is out of work.

Lastly he said, "Only noncompete agreements that are reasonable in time are considered reasonable, and enforceable. These days, a three-year noncompete period is never considered reasonable. Instead, the most time judges generally keep employees from competing is three or six months."

All the factors above would also determine whether a new corporate owner would be entitled to enforce a noncompete agreement, he said.

He added, however, that most noncompete agreements have language that says future owners can enforce the agreement's provisions, commonly called a "successors and assigns" clause.

But as "it is likely your noncompete is null and void, or probably effective for three or six months at most, there would be little, if anything, to enforce by the original employer or its acquirer," he said.

Sklover suggests that after reviewing your noncompete agreement, you consider writing a respectful letter, to be sent by email or overnight delivery, to the company's chief executive or president outlining the reasons suggested above.

Ask that "they confirm their agreement that your "outlived" noncompete agreement is now entirely null and void, so you can plan your life accordingly," he said. "If they differ on this point, it is better you know that now, not later."

To find more on noncompete contracts go to:

http://labor-employment-law.lawyers.com/employment-contracts/Non-Compete-Contracts.html or http://employment.findlaw.com/employment/employment-employee-job-loss/employment-employee-non-compete.html.