Should I worry about the non-compete agreement I signed?

Q: You're on the job hunt after several successful years at your company. But now you recall that you signed a non-compete agreement that restricts what companies you can join and what jobs you can take next. A recruiter just told you that none of his clients would hire you because of this. What should you do?

Nick's reply: In another Ask The Headhunter column, I suggested that a resigning employee has no obligation to tell her employer what company she is joining. In general, that's a good policy to follow. But if you join a competitor while you have a non-compete agreement with your current employer, things are different. You could be liable for violating that agreement, and the new company could find itself in trouble, too. If you try to hide your intent, your employer could easily hire an investigator to find out where you're going. Whew! This isn't just a question of career choices, but of potential legal liabilities.

I'm not a lawyer, and I don't give legal advice. But let's explore some issues that you should consider in a situation like this.

First, I will suggest that you absolutely should consult a good employment contracts attorney. If you try to figure this out on your own, it could cost you a lot more in the long run. Best case, it could turn out the non-compete is not enforceable (as in some states), or that it's not written well enough to stop you.

Second, begin to accept the possibility that if you signed a non-compete agreement (NCA), you may have to live with it. The courts often uphold NCAs. But, that's no reason not to fight one. This requires a legal review of the agreement by a good attorney. Remember: Your career and livelihood might be on the line. Don't ignore the importance of this.

Lots of people claim that NCAs are illegal because they prevent you from earning a living. In some cases, courts have thrown them out over this point -- but it depends on lots of factors, including what state you work in.

Start by reading your NCA carefully. If you need to spend a few bucks on an attorney for help, it's money well spent. The first purpose for the attorney isn't to file suit against your employer or to mount a defense. It's to try to negotiate a deal with your employer so you can move ahead with your career on friendly terms. That's the best solution.

If your current employer refuses to work this out, it might file suit against you and the new employer. Depending on the terms of your NCA, your current employer might win. That's why it's important to get a legal analysis before you take any action (or accept that job offer).

What else could happen? Some employers might ignore the NCA, unless they believe you might take sensitive information with you. It depends on the company, the kind of job you have, and on the company you're going to. Instead of guessing about this, try to talk to others who have left the company under similar circumstances. Poke around to learn how the HR department handles such situations. It may not be as bad as you think. But have that lawyer ready.

If the NCA really does limit your job choices, what should you do if you want to change jobs? You could change industries, but your immediate income is likely to take a hit. Worse, you may have no motivation to change industries. This is where I offer a bit of a lecture.

The best way to avoid this problem is to avoid signing an NCA to begin with. Some companies include NCAs in new job offers just as a matter of course. If a candidate balks, they will sometimes delete the NCA. It's always worth a try.

If you're stuck signing an NCA, try to negotiate it with the help of an attorney so it's reasonable and less restrictive. You might be able to work out a comfortable compromise. While I'm not a fan of unnecessary legal expenses, this is an issue that too many people gloss over when accepting a job. It's something that can hurt you. Prevention is worth its cost.

When a person is at the juncture presented in this scenario, an attorney is necessary to help interpret what a person can and cannot do. We pay for the legal advice up front, or we pay for it later if we get sued. I don't like to see anyone get sued. So the best course of action is to see a good lawyer.

Copyright 2008. Distributed by Universal Press Syndicate

Nick Corcodilos is author of "Ask The Headhunter: Reinventing the Interview to Win the Job" and the host of www.asktheheadhunter.com. He can be reached by e-mail at seattle@asktheheadhunter.com or at North Bridge Group, P.O. Box 600, Lebanon, NJ 08833. Sorry, no personal replies.