My boss has put a division of our company up for sale. He made sure to contact all companies in our industry in a 50 mile radius. He made them sign a confidentiality agreement (understandable) but a clause in this agreement states that none of those companies can hire any of our company employees for a 3 year period. Basically it has eliminated me from getting a job elsewhere in my industry for 3 years. The employees were not informed of this. I only found out inadvertently. Can he do that?

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Originally Posted by kaybee75

My boss has put a division of our company up for sale. He made sure to contact all companies in our industry in a 50 mile radius. He made them sign a confidentiality agreement (understandable) but a clause in this agreement states that none of those companies can hire any of our company employees for a 3 year period. Basically it has eliminated me from getting a job elsewhere in my industry for 3 years. The employees were not informed of this. I only found out inadvertently. Can he do that??

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They put these in all the time... they however can rarely be legally enforced in most cases. Particualrly if they terminate you for any reason...

They might be able to enforce the confidentiality part if they can prove anything... but courts have ruled you can work anyplace that will hire you.

I've moved back and forth between employers and competitors over the last 30 years without ever a problem.

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Originally Posted by kaybee75

Can he do that??

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Hello kay:

He can, but I don't know why he would.. It makes no sense whatsoever. If I were a prospect, I'd NEVER agree to those terms. It benefits NOBODY and only hurts the employees... I think you misunderstand the agreement..

excon

These clauses are no longer enforceable in NY.

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Originally Posted by JudyKayTee

These clauses are no longer enforceable in NY.

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Hello Judy:

This isn't a non-compete agreement the employees sign. It's part of a sales agreement. I have NO idea why the seller would prohibit the buyer from hiring a trained workforce, and I have NO idea WHY a buyer would agree to tie his hands like that.

I see NO benefit for ANYBODY in this agreement. That's why I question whether it truly IS part of the sale.

excon

I'm a little confused. So the owner of the company is putting up a division for sale. I can understand why he might tell other firms in the industry to see if they were interested in buying the division. But I can even understand why he would try to get competitors to agree not hire the staff.

What I don't understand is why ANY company would sign such an agreement. I might be able to understand if the restriction was from hiring EXISTING employees. But once an employee leaves the company there is no way to enforce this.

So the OP isn't prevented from being employed, but just from switching jobs while currently employed. But even that is not allowed under the 14th amendment.

Informally it is done all the time, formally yes they can do it, it may or may not be able to be enforced

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Originally Posted by excon

Hello Judy:

This isn't a non-compete agreement the employees sign. It's part of a sales agreement. I have NO idea why the seller would prohibit the buyer from hiring a trained workforce, and I have NO idea WHY a buyer would agree to tie his hands like that.

I see NO benefit for ANYBODY in this agreement. That's why I question whether it truly IS part of the sale.

excon

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I still think it's a non-compete, perhaps unusual, but the current employer is attempting to bind the current employees to a non-compete contract. Cannot be enforced in NY - of course, OP isn't in NY but...