How can I professionally resolve this conflict with my former employer?

Question

As framing material, I work in a city that might as well be called 'Farmersville' -- very rural focused, despite technically being a city. Farmlands all over the place. As such, it's not exactly the tech capital of the world, and tech jobs are highly limited, difficult to find, and in the past have been spread out all over town. The situation is made worse because we are relatively proximate to San Francisco, being about 4 hours away by car, so a lot of tech opportunities just go there instead. And yes, that means I live in California.

My (now former) employer is a company that has held me as a contractor for nearly two years. They recently moved me to employee status for a short period, putting me in a new 'tech hub' office building that is trying to change the nature of the tech business here in town (in part by renting office space to smaller companies at reasonable rates).

My employers ran out of money to pay me, and informed me that I was laid off two weeks ago. It was all a very amicable parting. Then they lost some jobs because people chose to contract with me directly. A perspective client who kept 'having work coming up' wound up coming up with work the week after I was laid off, and chose to go with me directly. No paperwork was signed then, but a clear intention to do work. (My first move was to try and get in on a job position I'd heard they had open, but it turned out they'd just filled it). Above and beyond this (and outside of my current concerns, I think), part of the building's premise was to help make them available for clients to find, and now jobs they could have gone for will probably go straight to me.

From my perspective, the moment they laid me off, I became a free agent again -- even if they planned to use me as a contractor in the future.

There's nothing in the contract I signed with them that covers non-competition, the closest is a clause that was supposed to keep me from poaching their clients from them. In fact, the contract in question was only for contracting work -- they never got me a new agreement for being an actual employee.

What is the most professional way to handle this conflict?

Answer 1

Unless the company has a signed non-compete agreement (which may or may not be applicable when you're laid off) they have no options regarding your current or future work. They may be offended by you joining another company which is in close proximity to them but that would only effect their desire to bring you back if they have the money in the future.

I believe they are only speaking to you on a personal basis (and unprofessionally) but how important is that to you if they are not signing your paycheck. No body desires to burn bridges but they have set the kindling and poured the gasoline with their actions.

Answer 2

Are they allowed to tell me where to look for work?

If you are laid off in the US, and don't have any specific language in your contract, and don't have any specific language in your severance agreement, I don't believe employers should attempt to tell you who you can or can not work for.

In 40+ years of working, I've never seen nor heard of a case where any company could dictate your new employer unless you had already signed an agreement limiting your choices. I'd love to see a case that contradicts this.

A few years back, I spoke about this with the CEO of one of the largest employers in my state. It was in regard to an employee who had actually signed a non-compete agreement, quit our company, and went to a competitor. The CEO told me that while the signed non-compete gave them the right to sue, in my state he'd never seen a case where the state penalized the former employer for that action, so he wasn't going to pursue it.

For me, I'd feel bound by a non-compete agreement. But if I hadn't signed a non-compete, I would not feel bound, and would contest any attempt to restrict my employment.

Remember, anyone can attempt to sue you for anything (or otherwise attempt to restrict you from anything). That doesn't mean they have a right (legal or otherwise).

The moment they laid me off, I became a free agent again

Maybe. But sometimes you sign a severance agreement when you are laid off that make you somewhat less of a "free agent" during your severance period. You might have agreed to be paid more severance in exchange for doing or not doing certain things.

Read your contract carefully.

Read your severance agreement carefully.

Talk to a lawyer if you want to know the answer according to your local laws.

It's (very) unfortunate that my going around looking for additional work closed out their opportunities to get those jobs, but in the end I just don't think you can call that unethical

Assuming you aren't soliciting their existing clients, I agree with your interpretation. Outside of any agreement, and outside of any information you haven't mentioned, I don't think your actions are unethical.

Note that some states (such as California) won't allow you to use certain information from your former employer in your next job, even if you don't have a written agreement in place. You can, for example, be barred from revealing confidential information or trade secrets from your former employer, or from using certain information, such as your previous employer's confidential customer list, to solicit business. (see: calbar.ca.gov/Public/Pamphlets/Employee.aspx#16)

Answer 3

My personal rule for something like this is as follows:

When people ask for non-compete agreements is usually for a period of 1 year and perhaps a 60 mile radius. So if I don't have such an agreement I assume the client/former employer would consider it fair for me to stay away from their clients for a year. However, if one of the clients is, for example, the US Air Force, the fact that you got a job at Warner-Robins in Georgia could hardly be a conflict of interest if you're in Sacramento.

Consider it this way: the company you were working for invested a certain amount of effort and expense in landing the client and maintaining goodwill. If you leave and the clients leave with you, they've made efforts they can't recoup, which neutral observers might view as unfair. However, if you've gone on to other things and a client comes to you in a year, it suggests your former employer has either lost interest or isn't making appropriate efforts. It was theirs to keep, and they dropped the ball.

I have seen, however, a situation where the 'now ex-' employer was ruthlessly milking a client base. In short, they were behaving in ways that deeply offended the clients, and the clients wanted that relationship ended as quickly as possible. In such circumstances the goodwill has been used up. Keep in mind that disinterested outsiders should have that view given the context of events.