Employment Law

I need help with a cease and desist from a past employer…

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I need help with a cease and desist from a past employer preventing me from starting my new position. I signed a non-disclosure, non-competition, and non-solicitation agreement when I was hired almost 3 years ago. Old company is in PA and I am in CO.

Lawyer's Assistant: How long does the non-compete last?... Read full answer

I need help with a cease and desist from a past employer preventing me from starting my new position. I signed a non-disclosure, non-competition, and non-solicitation agreement when I was hired almost 3 years ago. Old company is in PA and I am in CO.

Lawyer's Assistant: How long does the non-compete last? Is it limited to certain cities or states?

It lasts for 2 years after my employment is over and it is for all 50 states and prevents me from working in any aspect of the same industry. The old company was in shower door industry, so is a new company but they have different clients.

Lawyer's Assistant: Have you talked to a PA lawyer about the non-compete?

The attorney for my past company has contacted me with a cease and desist from my activity of starting with this new company.

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

No, but I have the full copy of the cease and desist and my signed agreement.

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Customer reply replied 5 months ago
I am looking for a letter to the attorney of my past employer. Also some advice if its ok if I can start work with the new company.
Answered in 36 minutes by:
1/4/2019
Adam Yarussi
Category: Employment Law
Satisfied Customers: 1,795
Experience: Attorney at Adam Yarussi & Associates
Verified

Non-Compete Agreements, also referred to as Restrictive Covenants, are often contained within employment contracts, or in some instances where employees do not have formal employment contracts, employees are required to sign separate documents which contain non-compete or non-solicitation agreements. Employers use these agreements to attempt to protect business interests. Laws regarding non-compete agreements and restrictive covenants are unique to each state and the likelihood that a court would enforce an agreement is a matter of state law.

The most common example of a restrictive covenant is a non-compete agreement which restricts a former employee's future employment opportunities. Other restrictions include protection for trade secrets and non-solicitation agreements, which seek to prohibit former employees from soliciting customers of the employer or attempts to hire former colleagues.

There are several different ways that non-compete agreements impact an employee once an employee leaves a business. If the employee finds another job, the former employer may have a claim or file a lawsuit against the employee to attempt to force the former employee to quit the new job. If an employee takes a position which the former employer believes is in violation of a non-compete agreement, it may sue the employee seeking a court order to prevent the employee from working. An employer must show that the employee has in fact taken or threatened to take an action in violation of the non-compete agreement.

Pennsylvania courts have generally found non-compete agreements to be enforceable if the agreement is incident to an employment relationship between the employer and employee; the restriction imposed is reasonably necessary for the protection of the employer's business interest; and the restrictions imposed are reasonably limited in duration (time) and geographic area. Nevertheless, the Pennsylvania Supreme Court has made it clear that non-compete agreements and restrictive covenants are not favored in Pennsylvania and are viewed as a trade restraint that prevents a former employee from earning a living. As a consequence, courts scrutinize restrictive covenants in employment agreements to determine whether the burden placed on the former employee is unreasonable. Even when courts decide to enforce an agreement, when an employer imposes restrictions broader than necessary to protect the employer, courts may limit restrictions to those that are reasonably necessary for the protection of the employer.

There are several principles which have developed as part of Pennsylvania case law in determining whether non-compete agreements / restrictive covenants are enforceable.

  1. Protection of a Legitimate Business Interest: An employer may not enforce a post-employment restriction on a former employee simply to eliminate competition; the employer must establish a legitimate business interest which is seeks to protect.

  2. Consideration for Signing the Agreement: In order for a restrictive covenant to be enforceable, there must be consideration exchanged for its execution. In other words, the employee must receive something in return. For instance, if an employee is already employed by the employer and asked to sign a restrictive covenant, the employer may need to increase the employee's salary, provide a lump sum payment or offer some other material consideration for an agreement to be enforceable.

  3. Termination of Employment or Voluntary Departure: Another important factor in determining enforceability is if an employee against whom the covenant is being enforced was terminated by the employer or left employment voluntarily. While a restrictive covenant can still be enforced even if an employee is terminated, the fact that an employee is terminated without cause is a factor that courts consider. The reasoning behind this law is that if an employer deems the employee worthless, the need for the employer to protect itself from the former employee is presumably insignificant.

  4. Assignment to a New Employer: In Pennsylvania, a restrictive covenant not to compete contained in an employment agreement, is confined to the employer with whom the agreement was made, and is not assignable to a new entity which acquires the former employer unless there is specific language permitting assignment in the original agreement.

  5. Non-Compete Agreements Incident to the Sale of a Business: Courts recognize that parties entering into agreements for the sale of a business generally possess equal bargaining power and these agreements are treated differently and are much more likely to be enforceable.

Trade Secrets and Confidential Information

The kinds of business interests that courts consider to be legitimate and protectable under a restrictive covenant include trade secrets and confidential information. A trade secret may be a formula, pattern, device or compilation of information which is used in a business and which provides the employer an advantage over competitors who do not know the trade secret or do not use it. Examples include a formula for a chemical or a manufacturing process or a customer list. For a trade secret to be recognized it must be substantially secret and provide competitive value to the employer owner. The question of whether information is a trade secret is determined on a case-by-case basis. If a competitor could obtain the information by legitimate means, it will not be given injunctive protection as a trade secret.

Non-Solicitation Agreements

Non-solicitation Agreements are designed to restrict former employees from taking an employer's customer or employees to the former employee's new employer. There are two types of non-solicitation agreements. Customer non-solicitation agreements prohibit former employees from initiating any contact with customers of the employer. Employee non-solicitation agreements prohibit former employees from soliciting former colleagues to leave the employer and join a new employer. In the absence of a non-solicitation agreement an employee is generally free to leave an employer and solicit the former employer’s customers and recruit the employer's employees.

In Pennsylvania non-solicitation agreements are enforceable if the agreement is incident to an employment relationship between the employer and employee; the agreement is supported by consideration which may include an initial offer of employment or a beneficial increase in the terms and conditions of employment; the agreement is reasonably necessary to protect the employer's legitimate interests; the agreement is reasonable in duration and geographic scope.

Preliminary Injunctions and Non-Compete Agreements / Restrictive Covenants

There is most often a unique expedited litigation process when an employer seeks to attempt to enforce a non-compete agreement / restrictive covenant. Employers argue that they will suffer immediate harm by an employee who violates a non-compete agreement. Consequently, employers file preliminary injunctions to attempt to obtain immediate relief. Preliminary injunctions are temporary court orders during the pendency of litigation which courts sometimes enter until a final decision regarding a cause of action is made. In order for an employer to obtain a preliminary injunction against former employee, the employer must establish that: (1) the injunction is necessary to prevent immediate and irreparable harm that cannot be adequately compensated by money damages; (2) greater injury will occur from refusing to grant the injunction than from granting it; (3) the injunction will restore the parties to their status quo as it existed before the alleged wrongful conduct; (4) the employer is likely to prevail on the merits; (5) the injunction will reasonably serve to enforce a restrictive covenant; and (6) the public interest will not be harmed if the injunction is granted.

They are enforceable, but they cannot be overly restrictive. If here are trade secrets, then you would be violating your noncompete agreement.

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Customer reply replied 5 months ago
I didn't have any trade secrets. I was outside sales and everything I had was allowed to be presented to clients. Also, any "secret" hardware that was used in the doors had its own protection in the form of a patent. So do you just provide advice or is there a service that you can help me with to help me start my new position.Thanks,

I can only provide general information. But if you remain employed, then you run the risk of having them file an injunction to prevent you from working. Now you can argue that it is unreasonable from PA to Colorado. The firm that represents them is a massive law firm, they have the capital to defend the non-compete. You need to speak with an attorney in person to determine your possible defenses. But you are facing an uphill battle. I just want to be honest with you.

Can you kindly leave a review.

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Will you reconsider your review to at least provide three stars. I have provided you the law. Sometimes, it is our job to tell people what they don't want to hear.

Adam Yarussi
Category: Employment Law
Satisfied Customers: 1,795
Experience: Attorney at Adam Yarussi & Associates
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William Kenworthy
Category: Employment Law
Satisfied Customers: 1,630
Experience: administrative law judge at Social Security Administration
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Sir: I happen to be an attorney with active status in 2 states—CO and PA. Colorado law concerning covenants not to compete indicates that they must not be unreasonable or overly restrictive. It appears that the agreement in question may fall into that category. Please download the letter from the attorney and a copy of the restrictive covenant in question. Also please tell me exactly what your job was in that company.
Judge Bill K. Ret.
William Kenworthy
Category: Employment Law
Satisfied Customers: 1,630
Experience: administrative law judge at Social Security Administration
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William Kenworthy and 87 other Employment Law Specialists are ready to help you
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Customer reply replied 5 months ago
Awesome, Judge Bill my position was outside sales, visiting accounts like Home Depot, Lowes, and plumbing wholesalers like Ferguson and Hajoca branches.
Customer reply replied 5 months ago

Judge Bill, I'm also looking for a response to the cease and desist from Dreamline. So I can start working. I also noticed that only the back page is signed by me the other pages are not signed, they could have modified it. Can you send a response on my behalf to the Dreamline's attorney?

I will be happy to provide that assistance. I will need to have a copy of your employment agreement and the cease and desist letter. I will also be forwarding to you a formal engagement letter indicating that an attorney-client relationship is being formed. You may send the documents to me at my e-mail address: **************.

William Kenworthy
Category: Employment Law
Satisfied Customers: 1,630
Experience: administrative law judge at Social Security Administration
Verified
William Kenworthy and 87 other Employment Law Specialists are ready to help you
Ask your own question now
Customer reply replied 5 months ago

Bill,

I have sent you the email and attachment.

Jeremy,

You need to indicate your acceptance of the proposal on this thread and give them your credit card information.

Bill

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Customer reply replied 5 months ago
Hello Bill,
I haven't heard from you since Thursday? Any updates?

I sent the letter. No response has been received so far. My e-mail address for further contact is***@******.***

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