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Will signing a non-compete restrict my ability to work on the same government contract?

Baltimore, MD |

I work for a sub-contractor on a large companies contract providing services to the government. My company wants me to sign a non-compete after 1+ year of employment (did not have to sign one at date of hire). Will signing this limit my ability to work on the same contract(s) for another company, even if the contract does not belong to my company but belongs to the "Prime" contract owner?
Here is the wording in question from the non-compete:

"During my employment with X or for one year after...will not solicit to perform or provide any services for its commercial customers for the specific contracts, programs, or projects between X and its commercial customers that are active or actively being pursued."

Thanks for the help

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Attorney answers 4

Posted

It is not 100% clear, but the brief quote you have provided suggests that you would not be prohibited from working for a successor subcontractor on a later contract. It seems that you are working on a rather typical service contract that gets recompeted every few years. It is common, even expected, that employees of the predecessor team will transition to the successor team. What this language seems to restrict is your ability to sign on to be part of a competing prime/sub team while a competition is in process. There probably are additional facts that clarify or change my reaction, and there may be other provisions in the agreement that could affect this. If you want something more definitive, I think you would need to have a lawyer review the agreement and analyze it in the context of a fuller understanding of the surrounding circumstances.

This response to the posted question is provided for general informational purposes only. None of this information is offered, nor should it be construed, as legal advice on any matter. Posting a question or receiving this response and any other related information, in whole or in part, is not intended to, and does not, create an attorney-client relationship. Although this response is believed to be accurate, it may not reflect the most current legal developments. The content and interpretation of the law addressed herein is subject to revision. Moreover, this response may not be correct because more facts are often needed to fully analyze a given situation. Accordingly, I accept no liability for inaccuracies or omissions, nor for any decisions made in reliance upon any information in this response. Consult legal counsel before making any decision or acting upon any information presented herein.

Asker

Posted

My problem is that the contract(s) which I am well qualified to work on, are long term, up to 10 years. The wording of the non-compete is very vague, and does not state any geographic limitations. I think that stating I may not compete on any contracts that company X is also working on is overly generalized. These contacts do not even belong to my company, rather they are simply providing qualified individuals to the Prime contract owner whom fills the positions for the government client. Thanks again

Howard A Wolf-Rodda

Howard A Wolf-Rodda

Posted

Again, it is very difficult to do anything more than raise questions in response to your question without a fuller understanding of your job, the government contracts/subcontracts, the complete text of the proposed agreement you're asking about - all in the context of your employment situation. I would suggest, however, that there is a distinction between the time you are employed by them and the time after which you leave. It would seem that the restriction only applies to you while you're working for them and for one year after you leave and only with respect to specific customers or prospective customers. Whether a particular post-employment restriction is reasonably limited is governed by a number of factors (for example time, scope, geography, etc.) is highly dependent on the facts of an individual situation. If you want more definitive guidance, you really should discuss your situation confidentially with a lawyer who could then take a look at the agreement in context- if your need for guidance is worth the cost of legal advice.

Posted

Issues:
1. Is your employer the prime contractor or a subcontractor to the prime?
2. Is its government contract with a “commercial customer” or with the government?
3. Does the FAR or its successor have any restriction on government contractors’ imposing non-compete covenants on their employees?
I don’t know the answers, but you should clarify Nos. 1 and 2 before you consult an employment lawyer who understands government contracting.

DISCLAIMER—This answer is for informational purposes only under the AVVO system, its terms and conditions. It is not intended as specific legal advice regarding your question. The answer could be different if all the facts were known. This answer does not establish an attorney client relationship. I am admitted only in California. (Bryant) Keith Martin sbbizlaw.com

Asker

Posted

1. My employer is one of many sub-contractors to the prime. 2. The Prime's contract is with the government. 3. I researched and was unable to find any limitations imposed by the FAR in respect to gov. contractors imposing non-competes. Thanks again

Posted

Maryland courts are not happy with non-competes, b/c they interfere with commerce. What you have shown, and there may well be other relevant passages, shows no limit on geography and a quite long time frame. If I recall correctly, Maryland courts will not rewrite such a non-compete if it is found to be excessive but will refuse to enforce it at all. I'd need to do research to be sure. The lack of a limit on what _type_ of work may also be a problem for enforcement.

I wish I could be more certain but legal questions tend not to have black and white answers—first shock on starting law school :-).

Licensed in Maryland with offices in Maryland and Oregon. Information here is general, does not create a lawyer-client relationship, and is not a substitute for consulting with an experienced attorney on the specifics of your situation.

Philip Leon Marcus

Philip Leon Marcus

Posted

Does a commercial customer include a customer that is itself not any government but which contracts directly or indirectly to a government. I could probably argue this one round or flat, depending on who is paying me.

Asker

Posted

Thanks for the insight Philip. I also find the wording to be very vague and from everything I have read, there should be a geographic limitation in place. Since the wording is so vague, my company could interpret the non-compete in any way they see fit. I seriously doubt that a court would allow such a blanket limit on my ability to earn a living. Especially when you consider that I have no knowledge of any trade secrets etc. of my current employer. Additionally, all of my marketable skills and experience are a result of my past employment rather than my current one. Thanks again

Philip Leon Marcus

Philip Leon Marcus

Posted

You are welcome. PLM

Posted

We see non-compete agreements in many different industries, and almost all of them are overbroad and only partially enforceable. It is definitely not "one size fits all." For example, in your quoted language, you would be restricted from work with "commercial customers...actively being pursued." Unless the employer gives you a list of them, at severance, and you had some part in pursuing them, this language is overly broad and not likely to be enforced against you. Your next step is to share all the facts of your work, tasks, and the document with counsel for more detailed advice.

Asker

Posted

Great insight, thank you sir.

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