Enforcability of Non-Compete Agreements In Another Country [closed]

Question

I currently work for a somewhat large technology company in Canada. As part of the documents required before I started with them, I had to sign a very broad non-compete agreement. It basically says I will not work, within one year of leaving the company, for any competitor, including Amazon, Google, Samsung, Microsoft, and about 20 other tech giants. It does not specify a geographical region, so I assume they mean the agreement applies to working for any "competitor" anywhere in the world. I do not possess any specific company knowledge which could harm the company if I were to work for the competition.

I am planning to go work for a particularly large tech company in the US, and will be leaving Canada to pursue a career that pays much better. It's to my understanding that in Canada, non-compete agreements are largely unenforceable. Does my leaving the country help reduce the enforceability (or lack thereof) of the NCA?

It seems extremely overreaching to basically bar me from working in my entire industry, which required a decade of schooling and training to work in, all throughout the entire world, for a solid year. That would mean I'd have to work some McJob just to pay rent for a whole year.

I've read through a number of StackExchange posts, and I think my approach would be that I don't tell my employer where I will be going to work during the exit interview, if there is one. I also wouldn't be updating my LinkedIn or Facebook profiles for at least a year, and biting my tongue if colleagues ask where I'm going.

Would this be a wise approach? Thank you.

Answer 1

The legality is anyone can do anything to you based on contract or policy if they wish. So if you want to live in fear, you can work to rule.

The reality? Most companies will not want to take legal action against you since there is a risk of that going public. Meaning they would most likely win a case against you but their reputation as being punitive against their employees will taint their reputation. Thus putting them at risk of being considered a toxic workplace where someone would never want to work.

The geographic aspect of this can work in your favor if they do not have a strong presence outside of Canada let alone in the U.S. Meaning, while they have the legal right to go after you, would they actually expend the time, energy & effort to reach beyond borders to stymie your career? I doubt that. It’s not only a costly & complex effort to do something like that, how does it then make them look in the global marketplace.

My advice? Just leave when you leave. You have no legal obligation to tell them where you will go to. Heck, you could just say you are going on a sabbatical to unwind after you leave them. Then just work wherever you wish.

The reality is most employment agreements are scary, but that is the point: To instill fear in you acting against the agreement. Nothing more or less. It’s a legal tool that is there to be potentially be used, but rarely be used. Live your life & don’t work a job you don’t like.

And… In a worst case scenario where they do come after you after the fact, you might be able to negotiate some kind of, “Well, I am here now. What do you want to do?” Basically an exit negotiation which is basically—perhaps—them asking you to do work or a task of some sort in the future. But I doubt that would happen as well.

Answer 2

You have to consider how important you are to your company. They mainly want to ensure that what you have been working with remains a secret to the company until they have a chance to benefit from it.

Say you are working as a chief engineer on the next generation of cell phones for Samsung, filing patent after patent. If you decide you want to jump to, say, Apple, then they want to make sure the work you have put into the company can come to use before you help their worst competitor. For most of us, this is probably not the case.

As a sidenote; where I live, Sweden, I've heard that this type of contract is not enforceable at all. After you quit the company, their contract with you is no longer applicable.

Answer 3

Double-check the exact terms of the non-compete clause. Usually these don't lock you out of the entire industry, only those parts of the industry which compete directly with products and services this company produces... and sometimes only those which would directly compete with the kind of product you were working on.

For example, I'm pretty sure (would have to check) that if I left Big Blue I could go into a job in the computer game field the next day... but I'd have to wait before going into servers, and possibly (again, have to check) before going into anything else IBM has its paws in.

And what that agreement says, and what they choose to enforce, may have some additional wiggle room between them, depending on what the company chooses to act upon. But finding out how much space that gives you can be tricky unless you're willing to admit you plan to leave and flat-out ask them.

Answer 4

It's tricky, especially since there are two countries involved. You'd need to ask a lawyer, and probably a Canadian lawyer.

If it was just one country: There may be laws making that kind of contract void. In Germany, they'd have to pay reasonable compensation (you have an offer for $100,000 a year at Microsoft, and one for $20,000 a year from McDonald's. Are they going to pay you the difference? )

With two countries: There may be Canadian laws that make it illegal to force you to stay in Canada. In the EU, any contract that stops an EU citizen from working in a different EU country than his own is illegal. There might be a US law that forbids foreign countries from stopping you taking a job in the USA.

A lawyer would know, but there are many possible reasons why this might be unenforceable.

Answer 5

You need to discuss this with legal counsel.

First, as JakeGould noted, the various costs and risks of pursuing legal action against you are high, particularly if you are in another country. We do not know enough about your situation to help you judge if what you do to know whether your employer would choose to do so anyway. You probably do.

Second, even if the non-compete is void, you will still be bound by a non-disclosure agreement and by intellectual property and trade secret agreements and laws.

Third, you have to be aware of the mechanics here. Even if you go to work for huge company, your old employer would not be suing them, it would be suing you. A significant risk is not that they win the suit, but that the suit itself will become enough of a hassle to interfere with your new employment.

To repeat ... talk to a lawyer.