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I work for XYZ, a brochure design company in Virginia. My Non-Compete
agreement states that I may not "contact or solicit contract work from
any XYZ client during or within 2 years of employment."
One of our clients, "Harry", is a manager at his father's Paper Supply
Company, and came to XYZ to create brochures to advertise his own side
business, which also happens to be a paper supply company. Harry's
company is not part of his father's, although it's likely Harry buys
his some of his supplies from his father.
Now, Harry's father's company would like their own brochures made, and
they have come to me directly, outside of XYZ. This wouldn't really
be a problem, except that their main contact with me is Harry himself
(he is still employed by his father).
Does this constitute a violation of my non-compete agreement? I feel
iffy about the situation because I would be dealing with Harry, and
not his father. Harry is an XYZ client. His father is not.
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I work for XYZ, a brochure design company in Virginia. My Non-Compete
agreement states that I may not "contact or solicit contract work from
any XYZ client during or within 2 years of employment."
One of our clients, "Harry", is a manager at his father's Paper Supply
Company, and came to XYZ to create brochures to advertise his own side
business, which also happens to be a paper supply company. Harry's
company is not part of his father's, although it's likely Harry buys
his some of his supplies from his father.
Now, Harry's father's company would like their own brochures made, and
they have come to me directly, outside of XYZ. This wouldn't really
be a problem, except that their main contact with me is Harry himself
(he is still employed by his father).
Does this constitute a violation of my non-compete agreement? I feel
iffy about the situation because I would be dealing with Harry, and
not his father. Harry is an XYZ client. His father is not.
There are different rules in different states concerning the effectiveness
of an agreement not to compete AFTER the term of employments ends. But
there is almost zero dispute over what happens while the employment term
continues. If you are still employed by XYZ, your non-compete agreement is
almost surely effective and enforceable. I used the word "almost" because I
am not familiar specifically with the laws of Virginia. Stay tuned for a
more specific answer.
McGyver
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I should clarify one thing:
Technically, they solicited me. And actually, not me, but another guy
who took on their project and subcontracted the work out to me. I
would directly report to this individual, not the Paper Supply
Company. So I'm really one person removed from Harry on this project.
There are different rules in different states concerning the effectiveness
of an agreement not to compete AFTER the term of employments ends. But
there is almost zero dispute over what happens while the employment term
continues. If you are still employed by XYZ, your non-compete agreement is
almost surely effective and enforceable. I used the word "almost" because I
am not familiar specifically with the laws of Virginia. Stay tuned for a
more specific answer.
McGyver
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scinonfi1976@yahoo.com (scinonfi1976) wrote in message news:<775fc071.0401141118.69afa195@posting.google.com>...
I should clarify one thing:
Technically, they solicited me. And actually, not me, but another guy
who took on their project and subcontracted the work out to me. I
would directly report to this individual, not the Paper Supply
Company. So I'm really one person removed from Harry on this project.
No matter how far removed from the untouchable Harry you are, there's
an issue beyond the non-compete agreement, and that is how much of a
duty of loyalty you owe to your employer. Converting an opportunity in
your employer's trade to your own, especially when it comes to you
through a customer of your employer, would be disloyalty, maybe
sufficient to allow them to terminate you for cause.
If I were a manager at your company and got wind of such an
arrangement, I would immediately recommend termination for cause.
--
Not a lawyer,
Chris Green
There are different rules in different states concerning the effectiveness
of an agreement not to compete AFTER the term of employments ends. But
there is almost zero dispute over what happens while the employment term
continues. If you are still employed by XYZ, your non-compete agreement is
almost surely effective and enforceable. I used the word "almost" because I
am not familiar specifically with the laws of Virginia. Stay tuned for a
more specific answer.
McGyver
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I should clarify one thing:
Technically, they solicited me. And actually, not me, but another guy
who took on their project and subcontracted the work out to me. I
would directly report to this individual, not the Paper Supply
Company. So I'm really one person removed from Harry on this project.
You are competing with your employer, right?
If Paper Supply Company and/or Harry contacted you, and that was not the
result of you informing them previously that you were engaging in the
business of creating brochures in competition with XYZ, then technically you
may be right, that you have not contacted or solicited contract work.
That's doubtful. How did they know you were in that business? It's hard to
believe you didn't contact them previously, somehow. And even if all you
did was tell Harry that you were moonlighting, that could support an
allegation of soliciting.
Even if you are right, all that means is you won't be successfully sued.
You still could be, and should be, fired, as Christopher Green explained.
McGyver
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Hi. I don't agree with the other responders so far.
First of all, your main problem is the way you are defining the word
"client." Legally, your company's "clients" are not people (i.e.
individual employees or owners), they are businesses. "Harry", as an
individual entity, is not XYZ's client; he *works* for (or owns) a
*company* which is XYZ's client. YOU can not help it if two separate
entities employ Harry and choose Harry to be their contact point for
acquiring brochures. The two businesses are still separate legal
entities, even though they both employ Harry and Harry is the same
person. When he's buying brochures for his own company, he's acting
as an agent of his company. When he's buying brochures for his dad's
company, he's acting as an agent of his dad's company. The fact that
he is still the same human being is irrelevant. Basically, he's a guy
with two jobs; he has two separate employers which are two separate
companies. Don't let the fact that both companies are owned by his
family and are in the same area of business confuse that fact for you.
Second, if you represented the wording of your non-competition clause
accurately, then you are not doing anything which violates it. You
didn't seek out or solicit the business of an existing client. If XYZ
wanted to prevent you from subcontracting to businesses that are NOT
existing clients, they could EASILY have worded their non-competition
clause to provide for that.
Third, Harry obviously knows XYZ *could* provide the service he wants.
He must have chosen to pursue these brochures outside XYZ for a
reason. If you can provide a comparable product and compete on your
own steam, within the boundaries of your non-competition clause,
that's called Capitalism. If XYZ wants Harry's dad's business so
badly, they can send over a sales rep. and let Harry's dad make that
decision. If he decides to go with an independent contractor rather
than XYZ, that's hardly *your* fault.
However, I will say that you had best be separating your side business
from XYZ with very clear boundaries. If I were you, I would not use
so much as a single piece of photocopier paper owned (or paid for) by
XYZ for your side business. If you're going off on your own, it had
better be using 100% all your own equipment, materials, and time.
Otherwise I agree with the guy who said "If I were a manager and I
discovered this, I would terminate you."
But stick to your non-competition clause, and use your own time and
resources... and you should be untouchable. I don't think it's
disloyal at all. If your company were that worried about it, like I
said, they could have put it in your non-competition clause in the
first place.
Good luck!
-HomeMadePizza
(not a lawyer)
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