Recently, I have seen more than one individual who over the course of their employment, has been asked to sign not one, not two but three or more agreements containing non-compete language.
Upon review I discovered the following:
Year 1996 – Contract A was signed – Employment Agreement. California Choice of law. 2 year non-compete prohibition to contact clients. No bonus attached to document.
Year 2001 – Contract B was signed – Non-Compete Agreement. New York choice of law. 1 year non-compete and prohibition from contacting clients, prospective clients, and other employees. Attached to bonus and does not in any way refer to original employment contract.
Year 2009 – Contract C was signed – Confidentiality Agreement. Virginia choice of law. 18 month non-compete, confidentiality agreement that considers customer identity as trade secret. No bonus. No reference to prior contracts – mostly disguised as a trade secret or confidentiality agreement.
“So lawyer,” client inquires. “Which of my agreements is binding? Which must I follow? And what can I do?”
All good questions. And my answer: “Let me see the contracts. I am not licensed in CA or NY and cannot give you an opinion as to the validity of those agreements at the time you signed them, but, I bet I can review the most recent one and explain in more detail whether the old ones are now void, etc.”
Which is what we can do… but here MY CONCERN:
WHY WOULD A COMPANY ASK AN EMPLOYEE TO SIGN 3 AGREEMENTS, UNDER 3 DIFFERENT STATE LAWS, WITH UNIQUE TERMS THAT MAY OR MAT NOT CONTRADICT EARLIER CONTRACTS?
ANSWER: No one knows… maybe, different law firms were hired, forms used and no one saw the problem created by being inconsistent. Either way, it happens. And an employee is not wrong in being confused.
If it happens again, and contract D is presented… maybe ask a few questions and perhaps the company will realize the mess they have created.