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Out of Work If You Do, Out of Work If You Don’t . . . Just How Ironclad is That Non-Compete You Signed?

At some point in your career you may find yourself asking this very question. Consider the situation where you are offered a job and made to sign an agreement that contains “non-compete/non-solicitation” clauses. Eager to secure the position and no intention of ever leaving, you of course sign and the agreement is buried in your employee file presumably collecting dust.

Fast-forward . . . you of course are a success for the company and have been for many years. You reach every quota, you exceed all expectations building strong relationships not only internal to the company but with clients near and far. And, between salary and bonus, you make a living worthy of a McMansion, two fancy cars along with a country club membership. The best part yet is, with your company there remains more room for growth and you are eager to seize the opportunities.

Then, comes a merger. Over the years, you’ve heard scuttle in the hall about the possibility of your company merging with another, but the rumor mill would always fade away almost as quickly as it formed. This time, however, it was for real. Your company is merging and the new company is going to clean house. They have their own employees (and certainly don’t need two of you regardless of your success rate) and of course they have their own way of doing things with their own people steering the ship.

Sure enough when the new company comes in, the terms and conditions of your employment – along with your salary and bonus structure – change, and not to your favor. While you try to stick it out, the writing is on the wall and your demise is eminent. Feeling you have no choice, you hit the pavement looking for new employment and once you receive an offer, you give your company the requisite 2-week notice, which is declined, and your separation is immediate.

Needless to say, out from the dusty file cabinet comes your employment agreement, the one with the non-compete/non-solicit provisions. And, your company waste no time in reminding you of its terms. Indeed, your company even notifies your prospective employer that it exists and they intend to enforce it. What do you do? What can you do? You’ve given notice, and accepted employment elsewhere however if your new employer takes you on, the are facing a lawsuit. Do they risk the time and costs of a lawsuit or might it be easier to simply rescind your offer. Do you, do they, have options?

If you speak to an experienced employment attorney, he/she will likely tell you “yes” you have options. And, your employment attorney will most likely discuss a way to preclude your old boss from interfering with your ability to secure new employment by way of a preliminary injunction. In Pennsylvania, injunctions of this nature are granted where an employee can establish (1) the injunction is necessary to prevent immediate and irreparable harm (i.e., there is no other adequate remedy at law (i.e., money damages); (2) the employee would suffer a greater injury if the injunction were not granted then the employer would suffer if granted (i.e., the benefit to the employee will outweigh the burden to the employer); (3) the injunction will restore the status quo between the parties; (4) a substantial likelihood of success on the merits (i.e., the employee’s right to the requested relief is clear); (5) the injunction is narrowly tailored to the needs it seeks to protect; and (6) the injunction will not adversely effect the public interests it seeks to promote.

In Jarvie v. Cumulus Media, Inc., (C.P. Berks January 22, 2015) the Court dismissed the defendant’s appeal from the court’s order granting plaintiff’s petition for a preliminary injunction. In that case, plaintiff’s employer, Citadel Broadcasting merged with Cumulus Media, Inc. Four years prior, plaintiff was hired by Citadel as a general sales manager for its radio stations. Plaintiff signed Citadel’s standard sales manager agreement which contained both non-compete and non-solicit provisions. After the merger, the terms and conditions of plaintiff’s job changed as did his salary and bonus structure. While plaintiff stayed on with the newly merged company for a period of time, he eventually sought and obtained new employment with another radio station and gave his notice. Defendant then contacted plaintiff’s prospective employer indicating its intention to enforce the agreement if it hired the plaintiff.

Plaintiff moved for a preliminary injunction, which was granted. The court found, among other things, that the terms and conditions of plaintiff’s job had in fact changed from that when he originally signed the agreement, plaintiff never consented to the change in employment duties, his salary and bonus dropped below that which he had been accustomed, defendant immediately accepted the plaintiff’s resignation thereby precluding him from making a living if an injunction were denied and preventing plaintiff from making a living and supporting his family; defendant admitted that without the plaintiff it really did not stand to lose significant revenue while granting the injunction would maintain the parties’ status quo.

So, if you find yourself strapped by a non-compete/non-solicitation agreement, contact an experienced employment law attorney or contract attorney – you may have immediate remedies available to you.

To read more about Jarvie v. Cumulus Media, Inc., the full opinion can be found at PICS Case No. 15-0129.

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