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I-765 (EAD) Discussion Forum
non-compete |
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I need some help from the gurus.
Mr. X works for a company A
Company C works with a preferred vendor called Company B and Company A works with Company B to get Mr. X works for Company C.
To make it simple.
Mr. X
Employed by compay A
Company A has a sub contract with Company B (middle man)
Company B has a contract with End Client (Company C) Where Mr. X is working.
Now, will the non-complete Mr.X has with Company A affect if Company C (end client) offers a job to Mr. X.
Thanks, brk.
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to ibrk:
Yes. It will come into play if you accept such an offer and start working FullTime with your end client. It is better to keep A and B posted and take next steps.
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to cyberbabu:
Will it be true even if A and C are in different business entities.
What are the options I have if Company A says I can't accept an offer.
Thanks,
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to ibrk:
as this discussion is related to non-compete want to raise a question here about the non-compete concept itself.
In a scenario if I work for a consulting company on a contract position in which I was hired after an interview with the client, how does the non-compete hold. If the company did not hire me before making sure I would be accepted by the client company to work for how can it claim the ownership of my ability to work for the client.
If I were to sign a document relinquishing all blame for killing me, if some one kills me that person would still be held for murder. so how different is this situation compared to non-compete where a company can hoard their rights to an earning potential merely on the basis of arranging the interview. Primarily since it is my skills that earn the moolah, why should the company get to have a share in it every pay period while it is no different that a placement agency in its function.
I am hoping I can open this argument for a broader discussion, so people can get a better understanding of how exactly non-compete is binding.
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to libr76:
non-compete helps companies for not hiring their consultants directly by the client for a certain amount of time. Also, it helps the consultant doesn't compete with the employer after termination for certain period of time.
each non-compete case will be unique. It all depends on the languague what is in it. I tried a lot in couple of days to get my feet wet on this issue, but the bottom line is consult with an employment attorney.
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to libr76:
Non competes are not rules written in stone. They are company specific; so it wont be fair to discuss without knowing what has been defined as a non-compete in your agreement. However i can confirm that it is usually enforced to restrict you from working with their clients. By that they mean anyone whom you would not have known otherwise. The entire business runs on contacts; so you cant say you only arranged an interview and charge me every paycheck. He will then issue you a full onetime bill amouting to the total. These arguments wont hold good in the court of law if the basis outlined above is breached.
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to cyberbabu:
If a company goes through a middle man to place a consultant in middle man's client how come the end client becomes the client of the company?. There is no relationship between the company and the client. From company's prespective, the client is a third party.
If they tell the client is an indirect customer of the company, then the following rule will also be correct?
if the company placed a consultant in IRS, then none of the employees can work anywhere in the US because every company is a direct or indirect client of IRS?
I agree you can't work for the company's clients or company in a similar business. But will the rule appy for company's client's customers also?
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to ibrk:
Eventually it goes down to your timesheet where you would have billed your time to a particular project, got it approved from the concerned manager. That will define your workplace location and client name. In the case of your IRS question, you can work for the IRS elsewhere but not in the location you worked earlier. Non competes are only specific to the location. If you work at IRS and identify a job within there completely not related to this project and in a different location, you will be fine.
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to cyberbabu:
Will it apply if I work for the same group but with a different manager?. Two managers share certain aspect of the product development.
One holds mainly support and the other one holds mainly development.
The manager who was authorized to sign my time sheets during contract period is not the one offering the new job.
Will the non-compete work in this case?
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to ibrk:
Cyberbabu,
I appreciate all you responses. Good that someone knows how non-compete works. Is there a way I can talk to you. I am also from India.
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to ibrk:
Like I said, location matters. You will be fine if the development manager is from a different office location than the one who signed your timesheets. In many cases, employers or middlemen ensure the non-compete caters to the entire organization (to cover their bases) or to the business unit you were working (btw, what does your say ??). So if you worked for the IT department, your non-compete will come into play no matter what if your new manager is from the same department. They will always claim that you came to know of the development manager (the one offering you the job) only because you were working there in the first place and that your job required to work with this manager indirectly. That'll end your case quickly.
"The three main factors that courts will usually scrutinize in determining the reasonableness of a non-competition agreement are time, activity prohibited, and territory (geographical or otherwise). A non-compete clause that is found to be unreasonably long in duration, unnecessarily inclusive of a wide range of activities, or covering an unreasonable territory is unenforceable."
So, it all depends on what you signed....and what loopholes you can find to get through that keeping in mind the reasonableness.
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to cyberbabu:
My non compete doesn't say anything about territory. It says only the customers. So, should I be fine on this part?
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to ibrk:
It wont. See what is the definition of Customer in the agreement. Typically the client is defined in the 1st page with wordings like so and so ..will be referred as the Client for the remainder of the agreement. In that location if they have simply the client name then it is bound to the location where you worked. In other words, Territiory implies the location you worked (that is the default).
Also, dont forget that the employer can always get an injunction which restricts you from working with the client until the time the case is resolved and verdict given. It is so easy to get an injunction. He has nothing to lose but you lose your new job. That is why i said it is important to speak to your ex-employer and talk it out. Crossing swords is a long process and will not work in your favor unless until you dare to take the risk.
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to cyberbabu:
I read before that H1B holders are not subject to non-compete agreements.
I signed this type agreements before and I changed employer without any problem.
"Employers cannot typically sue H-1B holders if they leave under US labor laws, regardless of whether the employee is an H-1B holder, a permanent resident or a US citizen. Although any employer can make this threat, the case history of employers who have attempted to sue or otherwise claim money from H-1B employees is limited. In 2001, San Mateo County Superior Court Judge Phrasel Shelton ruled in an H-1B employee's favor on the unfair competition statute and ordered the employer to drop restrictive language in its employee contracts. The H-1B employee in the case was awarded over $200,000 in fees and damages. In 2002 the employer appealed the decision and lost. In addition, Department of Labor's H-1B regulations issued in 2001 prohibit employers from making an H-1B employee pay a penalty for quitting prior to an agreed upon date"
Source:
http://en.wikipedia.org/wiki/H1B_visa
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