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Labor and Employment Law

Is My Noncompete Contract Superseded? Which Contract Applies?

 This reader question was left on my post Non-Compete Agreements - Top 5 Ways To Get Out of Yours:

Hi Donna, I am in the State of PA and had signed two year non competes to get options grants. I left the company under a voluntary separation agreement and part of it was a 1 year non-compete Agreement. Question is does the latter 1 year non compete supersede the 2 year Agreement. Also the Agreements are broad and cover the entire globe - what if I have not worked in the potion of the globe where I may work for the last two years? 

 The first thing I do when I look at a severance agreement for an employee who signed a noncompete is the clause at the end that probably starts with something like, "This is the entire agreement between the parties . . ." The reason I do that is because whether older agreements are still in effect depends on what this clause says.

If it says that it's the entire agreement between the parties except for the noncompete agreement, then the noncompete in the older agreement probably still applies.

If it says it's the entire agreement between the parties and can't be modified except by a writing signed by both parties, with no other modifier, then the old agreement vanishes. I've seen entire noncompete agreements vanish this way. In your case, you have new obligations that supersede the old ones. But in some cases I've actually told the employee to sign the agreement speedy quick before the employer realized that they just lost their noncompete. Can you say malpractice for the lawyer who drafted that one?

If it says that it's the entire agreement between the parties related to the subject matter of the agreement, then in your case the old one goes away. However, if it's a severance agreement without the noncompete language then the question will be what a court thinks the subject matter of the agreement is. I'd argue that the subject matter of the agreement was the obligations of the employer and employee post-termination and that it's gone. Would a judge agree with me? I don't have a crystal ball.

Of course, you're in Pennsylvania and I'm in Florida, so Pennsylvania lawyers might look at this completely differently. I'd love to hear from some of you in the comments. I'd suggest talking to an employment lawyer in your state before you sign.

 See more employment law posts on Donna Ballman's blog, Screw You Guys, I'm Going Home

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