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rsa.esq
rsa.esq, Lawyer
Category: Employment Law
Satisfied Customers: 73
Experience:  Sworn to the California Bar in 2011. Former staff editor at The New York Times Co. and seasoned news professional of 20 years experience in the U.S. and abroad.
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I worked as a Contractor in which I signed a non-compete

Customer Question

I worked as a Contractor in which I signed a non-compete covenant. I have a friend that was hired by the same contractor the same time I was hired, she resigned and 2.5 months later, she has a permanent position with the company. We were invited to talk with upper management 3 months after working for this company if we wanted to be considered for a permanent position. The contract stated that we had to wait one year before we could become gainfully employed with that company. Do I have grounds to sue the company? Which company should I sue? I'm thinking the contracting company since I signed the contract with them?
Submitted: 4 months ago.
Category: Employment Law
Expert:  rsa.esq replied 4 months ago.

Hi, I'm scott & I hope to provide you with some useful perspective on this.

First, be aware I am licensed in California, and in any case, lawyers in this forum cannot give specific legal advice, like suggesting whether or not to take any particular legal action. Rather, we only address issue of law generally.

In this economy, these are contractor relationships are increasingly common -- and I've workd that way myself, and probably will again!

And I know this is a frustrating situation -- and I am hoping to offer helpful perspective.

First, there are 2 contract relationships here: your contract relation to the contrcacotr-company that placed you to work, and that company's contract relationship with the client, where you were placed.

So as I read your question, I also see two components.

The first compenent is your promise not to compete by taking a job with the client company for up to1 year.

This is a fairly standard non-compete clause, curbing employees rights to go immediately to work for the client company. It's design to prevent client companies from poaching, and limited protection of the contractor's interest in having cultivated the client.

These non-compete clauses are generally perceived as legitimate contract terms, as long as they are not "unreasonable" or otherwise violate public policy. Also the terms of this limitation should have been made clear to you when you signed on with the contractor. (if not, that's a sparate issue!)

Whether a non-compete clause like this is valid, hinges on several factors, including amount of time specified, and 1 year has been generally upheld as "reasonable." An example of an unreasonable time would be a ban of 5 years, which has been held by courts as "unreasonable" as being too long and proscribing too much.

The second part of your question: how does your friend end up getting hired legitimately in less time?

Her ability to be hired was governed by the contract relationship between the client company and the contractor.

There may have been a provision for the company to hire, or the parties may have come to an agrement later to enable that. Contracts are freely changeable at the mutual contsent of the contracting paries.

Again, I myself have been in similar working arrangements, and I understand the frustrations, especally when we keep hearing from the government & media how well the economy is doing -- if the economy was doing so well, contract employees would not be so pervasive!

In any case, I know this probably not what you wanted to hear, but I hope the perspective helps, and I hope you will consider a positive rating if you thank so.

Best Wishes!

scott

Customer: replied 4 months ago.
I am in the state of Georgia, sorry that I left that out. I have spoken with HR at the Contracting company and I was told that everyone signs the same contract. I also had an interview but I could not go through with the interview because of the non compete covenant. I just need to know if I have grounds to sue? If I breach the covenant, they will sue me. Also, what kind of information do I need besides the contract, email where we were given the chance to show interest, proof that this individual is actually working at the facility, email that I received from the HR of the contracting company regarding the information that I was given?
Expert:  rsa.esq replied 4 months ago.

You might consider approaching the contractor and asking them to waive that clause in your case as well (get it in writing!).

But given the description of circumstance, I do not see any breach of contract for you to base an action on.

Covenants not to compete like this are generally held valid in these circumstances, so I see no basis there.

And the contractor was free to waive the non-compete provision with respect to your friend allowing her to be hired directly -- though more likely the hiring company compensate the contractor for that privilege.

We can't always provide the answers clients want -- as much sa we'd like.

& I hope the perspective is of some use to you, and that you will consider a positive rating.

Thanks.