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Non-Compete and Recruiter Reimbursement

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Sengles

Junior Member
What is the name of your state (only U.S. law)? KENTUCKY.

Okay so the long story short is that my current employer had me sign something very rare according to my new recruiter. My current employer had me sign paperwork before I joined their company. I signed it because it seemed like a normal thing to sign, but three clauses in my contract are worrisome. First, I'm looking to leave and join a quasi competitor. They aren't a true competitor, but one could agree that because they are in a similar line of business they COULD be defined that way.

My question is this:
Can they stop me from leaving and what are they likely to do legally if I do leave? Can they sue me and if so for what? Can they attempt to collect the 'recruitment fees' which is the only element would qualify, if they didn't disclose how much it was? I still have no idea how much it was.

Lastly, I'm bound by confidentiality right now, but IF they sue me, can I discuss that on social media? Do I have to wait until I go to court? When am I allowed to speak about it, the reason I ask, I have a large social following 100K+, which would probably give my current employer plus on any legal action.

Thanks for the help, just looking for guidance.

Here are the clauses in the AT WILL document I signed:

Upon Employee’s voluntary termination within three (3) years of initial employment, Employee agrees to reimburse EMPLOYER(name removed) for all relocation expenses, signing bonuses, and third-party recruitment fees which were either paid to the Employee or paid to a third-party on behalf of, or related to, the Employee’s employment. Employee agrees to make arrangements to remit payment to EMPLOYER(name removed) for the amount due within 20-days of termination.

Non-Competition - Competitor. Employee acknowledges that the goodwill of EMPLOYER(name removed) and its Affiliates and its marketing and support of services extends throughout the United States. In consideration of the rights granted to Employee under this Agreement, Employee covenants and agrees that for as long as Employee is employed and for one (1) year following Employee’s termination, for any reason other than a layoff due to lack of work, Employee shall not, without the prior written consent of EMPLOYER(name removed) , in any manner, directly or indirectly, own, manage, operate, consult, participate or be employed by, or otherwise connected with any person, firm, corporation, or enterprise in the United States, conducting operations that are competitive with the business activities being directly engaged in by EMPLOYER(name removed) as of the date on which Employee’s employment is terminated. Should a competing business wishing to employ Employee agree to the non-competition, non-solicitation, and confidentiality provisions established herein and enter into a mutually agreed upon separate Agreement with EMPLOYER(name removed) to that effect, then EMPLOYER(name removed) shall waive the Employee non-competition provision in relation to the Employee’s employment by that competing business.

not worried about this section...but here it is.
Non-Solicitation. Employee covenants and agrees that for as long as Employee is employed and for three (3) years following Employee’s termination, for any reason, Employee shall not, without the prior written consent of EMPLOYER(name removed) : (i) solicit, contact, interfere with, or attempt to divert any customer served by EMPLOYER(name removed) or its Affiliates, or Former Customer (as defined), or Potential Customer (as defined) identified by EMPLOYER(name removed) or its Affiliates during the period of Employee’s employment; or (ii) solicit any person then or previously employed by EMPLOYER(name removed) or its Affiliates to join Employee, whether as a partner, agent, employee, or otherwise, in any enterprise engaged in a business that competes with the business of EMPLOYER(name removed) or its Affiliates at the time of Employee’s termination.
 


LdiJ

Senior Member
What is the name of your state (only U.S. law)? KENTUCKY.

Okay so the long story short is that my current employer had me sign something very rare according to my new recruiter. My current employer had me sign paperwork before I joined their company. I signed it because it seemed like a normal thing to sign, but three clauses in my contract are worrisome. First, I'm looking to leave and join a quasi competitor. They aren't a true competitor, but one could agree that because they are in a similar line of business they COULD be defined that way.

My question is this:
Can they stop me from leaving and what are they likely to do legally if I do leave? Can they sue me and if so for what? Can they attempt to collect the 'recruitment fees' which is the only element would qualify, if they didn't disclose how much it was? I still have no idea how much it was.

Lastly, I'm bound by confidentiality right now, but IF they sue me, can I discuss that on social media? Do I have to wait until I go to court? When am I allowed to speak about it, the reason I ask, I have a large social following 100K+, which would probably give my current employer plus on any legal action.

Thanks for the help, just looking for guidance.

Here are the clauses in the AT WILL document I signed:

Upon Employee’s voluntary termination within three (3) years of initial employment, Employee agrees to reimburse EMPLOYER(name removed) for all relocation expenses, signing bonuses, and third-party recruitment fees which were either paid to the Employee or paid to a third-party on behalf of, or related to, the Employee’s employment. Employee agrees to make arrangements to remit payment to EMPLOYER(name removed) for the amount due within 20-days of termination.

Non-Competition - Competitor. Employee acknowledges that the goodwill of EMPLOYER(name removed) and its Affiliates and its marketing and support of services extends throughout the United States. In consideration of the rights granted to Employee under this Agreement, Employee covenants and agrees that for as long as Employee is employed and for one (1) year following Employee’s termination, for any reason other than a layoff due to lack of work, Employee shall not, without the prior written consent of EMPLOYER(name removed) , in any manner, directly or indirectly, own, manage, operate, consult, participate or be employed by, or otherwise connected with any person, firm, corporation, or enterprise in the United States, conducting operations that are competitive with the business activities being directly engaged in by EMPLOYER(name removed) as of the date on which Employee’s employment is terminated. Should a competing business wishing to employ Employee agree to the non-competition, non-solicitation, and confidentiality provisions established herein and enter into a mutually agreed upon separate Agreement with EMPLOYER(name removed) to that effect, then EMPLOYER(name removed) shall waive the Employee non-competition provision in relation to the Employee’s employment by that competing business.

not worried about this section...but here it is.
Non-Solicitation. Employee covenants and agrees that for as long as Employee is employed and for three (3) years following Employee’s termination, for any reason, Employee shall not, without the prior written consent of EMPLOYER(name removed) : (i) solicit, contact, interfere with, or attempt to divert any customer served by EMPLOYER(name removed) or its Affiliates, or Former Customer (as defined), or Potential Customer (as defined) identified by EMPLOYER(name removed) or its Affiliates during the period of Employee’s employment; or (ii) solicit any person then or previously employed by EMPLOYER(name removed) or its Affiliates to join Employee, whether as a partner, agent, employee, or otherwise, in any enterprise engaged in a business that competes with the business of EMPLOYER(name removed) or its Affiliates at the time of Employee’s termination.

You are going to need to have that contract reviewed by a local attorney. I suspect that it is unenforceable because its flat out too broad, but it is best to have the opinion of a local attorney.
 

eerelations

Senior Member
The reimbursement provisions are SOP and enforceable. The confidentiality provisions are also SOP and generally go on forever unless otherwise specified. (Just because the recruiter has never seen them before doesn't mean they are rare; they are in fact quite common.) The non-compete parts should be reviewed by an attorney.

OP, I am very concerned about your plan to talk about your employer on social media if your employer sues you. Not only would this be a breach of the confidentiality provisions in your agreement, but everything you and your followers say about your employer and the lawsuit can (and probably will) be used against you in court.
 

Sengles

Junior Member
[SUB][/SUB]
The reimbursement provisions are SOP and enforceable. The confidentiality provisions are also SOP and generally go on forever unless otherwise specified. (Just because the recruiter has never seen them before doesn't mean they are rare; they are in fact quite common.) The non-compete parts should be reviewed by an attorney.

OP, I am very concerned about your plan to talk about your employer on social media if your employer sues you. Not only would this be a breach of the confidentiality provisions in your agreement, but everything you and your followers say about your employer and the lawsuit can (and probably will) be used against you in court.

I want to be able to discuss the CASE, not the agreement. In other words, IF my employer does sue me, what they are suing me for is public record correct? Simply stating my employer is suing me on social media and reaching out to valued media contacts isn't a breach of anything confidential....it's simply reporting what is happening right?

I have the fantastic friends in the media and they probably would be very willing to write a story or two about a public case. I believe my employer could be VERY intimidated by that possibility, which is fantastic leverage. In other words, I wouldn't speak about specifics of the agreements at all, I'd simply state what is public record. Simply discussing a court case that is public record can't possibly be used against me, because it's public record correct?

Also...stupid question....SOP? Also, even though the reimbursement fee isn't known to me and wasn't disclosed in legal documentation, you believe it's enforceable? I still do not know the dollar amount.
 

Sengles

Junior Member
You are going to need to have that contract reviewed by a local attorney. I suspect that it is unenforceable because its flat out too broad, but it is best to have the opinion of a local attorney.

I have a early Monday morning appointment....just trying to make sure I come armed with questions to ask him! Thanks for the guidance.
 

LdiJ

Senior Member
The reimbursement provisions are SOP and enforceable. The confidentiality provisions are also SOP and generally go on forever unless otherwise specified. (Just because the recruiter has never seen them before doesn't mean they are rare; they are in fact quite common.) The non-compete parts should be reviewed by an attorney.

OP, I am very concerned about your plan to talk about your employer on social media if your employer sues you. Not only would this be a breach of the confidentiality provisions in your agreement, but everything you and your followers say about your employer and the lawsuit can (and probably will) be used against you in court.

I potentially disagree about the reimbursement provisions because the term is three years. SOP is two years max...and that generally applies to relocation benefits, not the cost of the recruiter. No business has to use a recruiter to hire. If they choose to do so that expense should be on them. I don't disagree about the confidentiality provisions but expecting the new employer to abide by the same is pushing the envelope. In addition, after a certain passage of time it would be literally impossible to prove that confidentiality was breached by any one specific person...even if the new employer never hired anyone else from the original company. Secrets don't stay secret forever.

The non-compete parts are definitely too broad.

Obviously we are not talking about the CEO of a Fortune 500 company here...or anything remotely close to that or the OP wouldn't be on an internet forum...or be needing to wait until Monday to talk to an attorney.
 

davew128

Senior Member
My feeling is that the reimbursement costs are completely bogus. The costs an employer incurs in hiring an employee that don't benefit the employee are not the employee's responsibility should they decide to leave. If we were talking about relocation, specific training or licensing costs I would say differently but the costs an employer incurs to hire an employee is their problem regardless of how long the employee remains employed there.
 

eerelations

Senior Member
My feeling is that the reimbursement costs are completely bogus.

Dave, if an employee contractually agrees to reimburse recruitment fees (as OP has done by signing a document that states he will reimburse recruitment fees under certain stated conditions), then the employee is contractually bound to reimburse said recruitment fees. In contract law, whether or not this makes sense to you personally is irrelevant.

OP, as you've been told several times on the other forum, the amount of the fees need not be specified in the contract for the reimbursement clause to be enforceable. (If you are so concerned about the amount, why didn't you ask what it was before signing the contract?) While I can't see what that amount is from here, most headhunter fees are between 10 and 25 per cent of the headhunted's annual base salary at hire. With this information, you might be able to make an educated guess as to the amount you're dealing with.

Regarding whether or not this is SOP, please note that I have reviewed, written, presented, explained and enforced many many hundreds of employment agreements, and yes, clauses of this type are indeed SOP. Your disagreement with this indicates that you believe you have a lot of experience in this area - how much experience do you have?
 

eerelations

Senior Member
OP, the confidentiality clause in your agreement probably doesn't refer to "the case" it probably refers to your employer's business. Of course it is legal to discuss the details of a public case on social media! However, please note that anything you and/or your followers say about "the case" can be used against you in court. In fact I will be very very surprised if your attorney doesn't insist that you not speak about "the case" with anyone. (So surprised that I would recommend you change attorneys.)

To summarize, speaking about this would not be a violation of the agreement, it would instead be detrimental to your overall chances of prevailing against your employer.
 

davew128

Senior Member
Dave, if an employee contractually agrees to reimburse recruitment fees (as OP has done by signing a document that states he will reimburse recruitment fees under certain stated conditions), then the employee is contractually bound to reimburse said recruitment fees. In contract law, whether or not this makes sense to you personally is irrelevant.
I understand contract law just fine thank you. I also know that most employment agreements do NOT rise to the level of a contract.
 

eerelations

Senior Member
I understand contract law just fine thank you. I also know that most employment agreements do NOT rise to the level of a contract.

Well, not as much as I do, it seems. (Don't forget, I write and enforce these things for a living, for nigh on 20 years now.)

Dave, an employment agreement is a contract. In the contract world, "Employment Agreement" is a standard and oft-used synonym for "Employment Contract". It's offer of employment letters that often don't rise to contractual levels. And if you read OP's posts it's quite obvious he's talking about a contract, not an offer letter.

However, if you want to be really sure about this, let's ask the OP. OP, is the document you're inquiring about an offer letter or is it a contract?
 

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