Received a Job Offer, Conflict with Non-compete?

IDontWorkForRR

New Member
9
Hi folks,

I received a job offer from a local company that offers personal insurance as one of it's many product offerings to manage their insurance sales team. To date, I've been a producer with an independent agency.

I was reviewing my non-compete today in advance of accepting the offer and came across a forgotten clause: "IDontWorkForRR covenants and agrees that for a period of two years following the termination of his employment with Company, howsoever caused, he will not, directly or indirectly, receive any benefits as an owner of any agency or brokerage business on his own behalf or as an employee, associate, shareholder, or partner of another, engage in the insurance agency or brokerage business (including that of insurance adviser, consultant, or risk manager), within [County and Surrounding Counties]."

Does this sort of thing hold water? Does this mean I can't accept a job as a sales manager supporting the insurance division of another company? Any thoughts on this?
 
It might not hold up once we get to court, but is this sort of switch the sort of thing they would be able to bring me to court over in the first place?
 
I'm no attorney, but to this layman, that sounds WAY too broad to be enforced. DO NOT, however, plan on soliciting any of your current employer's customers, as that will DEFINITELY get you snagged.

This sort of thing can vary widely by state, but at least in my home state, a territorial restriction is ok within reason (25 to 50 miles), but not all-encompassing across the industry the way this one is. For example, they could have prevented you from selling personal lines P&C in proximity of their agency if that's what your current agency sells, but not any of the other related professions. The contract would likely be thrown out here. As always, your state, your contract, your circumstances, and your results may vary.

Another thing to keep in mind: even if you know you could win in court, you have to ask yourself if you could afford defense costs. Just something to consider.
 
I'm no attorney, but to this layman, that sounds WAY too broad to be enforced. DO NOT, however, plan on soliciting any of your current employer's customers, as that will DEFINITELY get you snagged.

This sort of thing can vary widely by state, but at least in my home state, a territorial restriction is ok within reason (25 to 50 miles), but not all-encompassing across the industry the way this one is. For example, they could have prevented you from selling personal lines P&C in proximity of their agency if that's what your current agency sells, but not any of the other related professions. The contract would likely be thrown out here. As always, your state, your contract, your circumstances, and your results may vary.

So it's reasonably safe (within the bounds of your "as always disclosure") to assume that moving into a position as a sales manager and not soliciting any of my old clients or their clientele for two years should leave me fairly safe?
 
While M&M is right, they can still drag you into court and make you spend a lot of money to defend and vindicate yourself. Just ask Somarco.

The question is, will they?
 
So it's reasonably safe (within the bounds of your "as always disclosure") to assume that moving into a position as a sales manager and not soliciting any of my old clients or their clientele for two years should leave me fairly safe?

Not really. You have some things in your favor and so does the other side but be careful to not try to elicit responses here that you want to hear.

You need to consult with an attorney. Probably you will end out feeling better about things afterwards but that is a different kind of better than just assuming what you can feel reasonably safe about based on some comments on the forum, including mine. Not the right way to position yourself.

We don't really need to get into it here, you can go over it with your attorney but courts usually look at what kind of investment your employer made in you too. If for example an employer brings someone into the area and gives them a start up salary to hold them over for a while and free office space, and takes the new agent all over the state to help make contacts in an area in which he was working then that is one thing. As compared to an agent who was hired one day and signed that same clause but then quit three months later because the employer never did a damn thing for him. Things like that. Not sayin any of this applies to you but factors like that come into play.

Your understanding right now is shaky. If you see a lawyer for a consultation then you will be less shaky. It is good to be less shaky.
 
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Not really. You have some things in your favor and so does the other side but be careful to not try to elicit responses here that you want to hear.

You need to consult with an attorney. Probably you will end out feeling better about things afterwards but that is a different kind of better than just assuming what you can feel reasonably safe about based on some comments on the forum, including mine. Not the right way to position yourself.

We don't really need to get into it here, you can go over it with your attorney but courts usually look at what kind of investment your employer made in you too. If for example an employer brings someone into the area and gives them a start up salary to hold them over for a while and free office space, and takes the new agent all over the state to help make contacts in an area in which he was working then that is one thing. As compared to an agent who was hired one day and signed that same clause but then quit three months later because the employer never did a damn thing for him. Things like that. Not sayin any of this applies to you but factors like that come into play.

Your understanding right now is shaky. If you see a lawyer for a consultation then you will be less shaky. It is good to be less shaky.

There's your best answer. Do it for your benefit, and your prospective employer. If it comes to a lawsuit, they will get dragged into it too.
 
Hi folks,

I received a job offer from a local company that offers personal insurance as one of it's many product offerings to manage their insurance sales team. To date, I've been a producer with an independent agency.

I was reviewing my non-compete today in advance of accepting the offer and came across a forgotten clause: "IDontWorkForRR covenants and agrees that for a period of two years following the termination of his employment with Company, howsoever caused, he will not, directly or indirectly, receive any benefits as an owner of any agency or brokerage business on his own behalf or as an employee, associate, shareholder, or partner of another, engage in the insurance agency or brokerage business (including that of insurance adviser, consultant, or risk manager), within [County and Surrounding Counties]."

Does this sort of thing hold water? Does this mean I can't accept a job as a sales manager supporting the insurance division of another company? Any thoughts on this?

What consideration did they provide for that covanent?
 
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