My wife signed a no compete when she started at a private insurance company a couple of years ago. Recently she was let go because of her boss basically being a jerk to put it mildly. The no compete is supposedly in effect for 2 years. How binding is it? Is it still enforced even though she was let go? I researched online and saw where some courts were overturning the no compete for some because they were originally set up to protect the private insurance companies from having clientelle stolen away and not to prevent the employee from being able to work anywhere. What are the chances she could go back to work at another insurance company?
OT: Law advice needed - No Compete Contracts
- Thread starter SteelDawg03
- Start date
Its been my experience that judges do not like to uphold the agreements. Especially if they are a condition for employment instead of compensation for signing. If she is clerical, I can not imagine a judge enforcing it. If she is in sales, then I can see it maybe being enforced.
2 things-
1- My work has a no compete. But it is limited only to what I work on here. So I could work for a competitor as long as I wasnt working with who I currently work for.
2- I take issue with a lot of ethics rules that apply to lawyers(my wife is one) and find many to be flat out stupid- but one that I have always likes is that there are no noncompete clauses. They are allowed to persue employment wherever without restriction from their previous employer. It helps ensure the client is receiving the best(their preferred) legal representation. It benefits the lawyer, but also benefits the clients.
1- My work has a no compete. But it is limited only to what I work on here. So I could work for a competitor as long as I wasnt working with who I currently work for.
2- I take issue with a lot of ethics rules that apply to lawyers(my wife is one) and find many to be flat out stupid- but one that I have always likes is that there are no noncompete clauses. They are allowed to persue employment wherever without restriction from their previous employer. It helps ensure the client is receiving the best(their preferred) legal representation. It benefits the lawyer, but also benefits the clients.
I believe non-competes are not favored in Mississippi courts. Because of the underlying reasons for non-competes (to protect the company's interests), I would also think that her employment being terminated (for whatever reason) would nullify or at least inhibit the company's ability to enforce it.
How big is the company? That may play a part in whether they would go to the trouble to try to enforce it. I doubt they go to that trouble unless her new employment directly affects their bottom line. How restrictive is the language of the contract (as in, how specific is it about prohibited activities)? And coach66 is right - if she received some sort of consideration for entering the contract, it's definitely more likely to be enforced. If it was just a condition of employment, though, which she had to accept in order to take the job, it's less likely.
eta: Check out Kennedy v. Met Life, found here.
¶ 4. Non-competition agreements have been viewed by this Court as "restrictive contracts [which] are in restraint of trade and individual freedom and are not favorites of the law." Frierson v. Sheppard Building Supply, Co., 247 Miss. 157, 172, 154 So.2d 151, 156 (1963). See also Texas Road Boring Co. v. Parker, 194 So.2d 885, 888 (Miss.1967). Only when such agreements are reasonable will they be considered valid and upheld by this Court. Frierson, 247 Miss. at 172, 154 So.2d at 156. The validity and the enforceability of a non-competition agreement are largely predicated upon the reasonableness and specificity of its terms, primarily, the duration of the restriction and its geographic scope. Empiregas, Inc. v. Bain, 599 So.2d 971, 975 (Miss.1992); Redd Pest Control Co. v. Heatherly, 248 Miss. 34, 157 So.2d 133 (1963). The burden of proving the reasonableness of these terms is on the employer. Texas Road Boring Co., 194 So.2d at 889.
How big is the company? That may play a part in whether they would go to the trouble to try to enforce it. I doubt they go to that trouble unless her new employment directly affects their bottom line. How restrictive is the language of the contract (as in, how specific is it about prohibited activities)? And coach66 is right - if she received some sort of consideration for entering the contract, it's definitely more likely to be enforced. If it was just a condition of employment, though, which she had to accept in order to take the job, it's less likely.
eta: Check out Kennedy v. Met Life, found here.
¶ 4. Non-competition agreements have been viewed by this Court as "restrictive contracts [which] are in restraint of trade and individual freedom and are not favorites of the law." Frierson v. Sheppard Building Supply, Co., 247 Miss. 157, 172, 154 So.2d 151, 156 (1963). See also Texas Road Boring Co. v. Parker, 194 So.2d 885, 888 (Miss.1967). Only when such agreements are reasonable will they be considered valid and upheld by this Court. Frierson, 247 Miss. at 172, 154 So.2d at 156. The validity and the enforceability of a non-competition agreement are largely predicated upon the reasonableness and specificity of its terms, primarily, the duration of the restriction and its geographic scope. Empiregas, Inc. v. Bain, 599 So.2d 971, 975 (Miss.1992); Redd Pest Control Co. v. Heatherly, 248 Miss. 34, 157 So.2d 133 (1963). The burden of proving the reasonableness of these terms is on the employer. Texas Road Boring Co., 194 So.2d at 889.
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Something seems inherently wrong with firing someone who has consented to signing a non-compete and then enforcing the non-compete. It`s probably legal but it kinda goes against the "do right" rules that most try to follow.
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She was just getting started in insurance. She isn't a threat to call anyone to steal away clientele. When she started she wasn't paid anything extra to sign it. The no compete would move her 25 miles outside of the city we live in to work which isn't an option.