Exhibit 10.9
NON-COMPETITION AGREEMENT
In consideration of Labor Ready, Inc., or the Labor Ready, Inc. subsidiary, affiliate, related business entity, successor, or assign employing Executive (collectively Labor Ready or the Company), employing me, compensating me, providing me with benefits, providing me with administrative support; providing me with the benefit of Labor Readys research, know how, market strategies and business plans; and specifically in consideration of the additional consideration provided in the Executive Employment Agreement and Change In Control Agreement executed concurrently herewith, the adequacy, sufficiency and receipt of which is hereby acknowledged, and intending to be legally bound, I, (Executive), hereby acknowledge that I understand and agree that the provisions hereof are part of and a condition of my employment with Labor Ready, and are effective as of December 31, 2006.
marketing, marketing strategies, pricing and financial information, research, training, know-how, operations, processes, products, inventions, business practices, databases and information contained therein, its wage rates, margins, mark-ups, finances, banking, books, records, contracts, agreements, principals, vendors, suppliers, contractors, employees, applicants, Candidates, skill sets of applicants, skill sets of Candidates, marketing methods, costs, prices, price structures, methods for calculating and/or determining prices, contractual relationships, business relationships, compensation paid to employees and/or contractors, and/or other terms of employment, employee evaluations, and/or employee skill sets; (c) the content of all of Labor Readys operations, sales and training manuals; (d) all other information now in existence or later developed which is similar to the foregoing; (e) all information which is marked as confidential or explained to be confidential or which, by its nature, is confidential or otherwise constitutes the intellectual property or proprietary information of Labor Ready; and/or (f) any of Labor Readys trade secrets. For the purposes of this Section, all references to, and agreements regarding, Confidential Information or Confidential Information of Labor Ready also apply to Confidential Information belonging to any affiliate of Labor Ready, and to any confidential or proprietary information of third party clients that Labor Ready has an obligation to keep confidential. Executives covenants in this Section shall protect affiliates and clients of Labor Ready to the same extent that they protect Labor Ready. Confidential Information shall not include any portion of the foregoing which (i) is or becomes generally available to the public in any manner or form through no fault of Executive, or (ii) is approved for Executives disclosure or use by the express written consent of the Chief Executive Officer of Labor Ready, Inc.
B. Confidentiality, Non-Disclosure and Non-Use Obligations.
1. Executive agrees that all records and Confidential Information obtained by Executive as a result of Executives employment with Labor Ready, whether original, duplicated, computerized, memorized, handwritten, or in any other form, and all information contained therein, are confidential and the sole and exclusive property of Labor Ready. Executive understands and agrees that the business of Labor Ready and the nature of Executives employment will require Executive to have access to Confidential Information of and about Labor Ready, its business, its Candidates, and its Clients. During Executives employment and thereafter, Executive will not use Confidential Information or remove any such records from the offices of Labor Ready except for the sole purpose of conducting business on behalf of Labor Ready. Executive further agrees that during Executives employment and thereafter, Executive will not divulge or disclose this Confidential Information to any third party and under no
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circumstances will Executive reveal or permit this information to become known by any competitor of Labor Ready.
2. Executive agrees and acknowledges that all Confidential Information is to be held in confidence and is the sole and exclusive property of Labor Ready and/or its affiliates or clients. Executive recognizes the importance of protecting the confidentiality and secrecy of Confidential Information. Executive agrees to use Executives best efforts to protect Confidential Information from unauthorized disclosure to others. Executive understands that protecting Confidential Information from unauthorized disclosure is critically important to Labor Readys success and competitive advantage, and that the unauthorized use or disclosure of Confidential Information would greatly damage Labor Ready. Executive recognizes and agrees that taking and using Confidential Information, including trade secrets, by memory is no different from taking it on paper or in some other tangible form, and that all of such conduct is prohibited. Executive agrees that, prior to use or disclosure, Executive will request clarification from Labor Readys legal department if Executive is at all uncertain as to whether any information or materials are Confidential Information.
3. During Executives employment and in perpetuity after the termination of Executives employment for any or no cause or reason, Executive agrees: (a) not to use (or allow others to wrongfully use) any Confidential Information for the benefit of any person (including, without limitation, Executives benefit) or entity other than Labor Ready; and (b) not to, except as necessary or appropriate for Executive to perform Executives job responsibilities, disclose (or allow others to wrongfully disclose) any Confidential Information to others or download or make copies of any Confidential Information without Companys written consent, or remove any such records from the offices of Labor Ready except for the sole purpose of conducting business on behalf of Labor Ready. If at any time Executive ever believes that any person has received or disclosed or intends to receive or disclose Confidential Information without Companys consent, Executive agrees to immediately notify Company.
4. At any time during Executives employment upon Companys request, and at the end of Executives employment with Company, even without Companys request, Executive covenants, agrees to, and shall immediately return to Labor Ready, at its headquarters in Tacoma, Washington, all Confidential Information as defined herein, and all other material and records of any kind concerning Labor Readys business, and all other property of Company that Executive may possess or control.
5. At all times, Executive agrees not to directly or indirectly take, possess, download, allow others to take or possess or download, provide to others, delete or destroy or allow others to delete or destroy, any of Labor Readys Confidential Information or other property, other than in the normal course of business.
6. Executive agrees that these covenants are necessary to protect Companys Confidential Information, and Companys legitimate business interests (including, without limitation, the confidentiality of Labor Readys business information and other legitimate interests), in view of Executives key role with each branch of Company and its affiliates and the
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extent of confidential and proprietary information about the entire Company and its affiliates and clients to which Executive has information. Company and Executive agree that the provisions of this Section do not impose an undue hardship on Executive and are not injurious to the public; that they are necessary to protect the business of Company and its affiliates and clients; that the nature of Executives responsibilities with Company under this Agreement and Executives former responsibilities with Company provide and/or have provided Executive with access to Confidential Information that is valuable and confidential to Company; that Company would not employ or continue to employ Executive if Executive did not agree to the provisions of this Section; that this Section is reasonable in its terms and that consideration supports this Section, including new consideration as set forth in the Executive Employment Agreement.
C. Duty of Loyalty.
1. Executive agrees that at all times during Executives employment with Labor Ready, Executive owes Labor Ready a duty of loyalty and a duty to act in good faith. Executive agrees that during Executives employment, Executive will not individually, or in combination with any other Executive, individual, or competitor of Labor Ready, violate or breach the terms of this Agreement.
2. Executive agrees to devote all time that is reasonably necessary to execute and complete Executives duties to Company. During the time necessary to execute Executives duties, Executive agrees to devote Executives full and undivided time, energy, knowledge, skill and ability to Companys business, to the exclusion of all other business and sideline interests. Because of the agreement in the preceding sentence, during Executives employment with Company, Executive also agrees not to be employed or provide any type of services, whether as an advisor, consultant, independent contractor or otherwise in any capacity elsewhere unless first authorized, in writing, by a proper representative of Company. In no event will Executive allow other activities to conflict or interfere with Executives duties to Company. Executive agrees to faithfully and diligently perform all duties to the best of Executives ability. Executive recognizes that the services to be rendered under this Agreement require certain training, skills and experience, and that this Agreement is entered into for the purpose of obtaining such service for Company. Upon request, Executive agrees to provide Company with any information which Executive possesses and which will be of benefit to Company. Executive agrees to perform Executives duties in a careful, safe, loyal and prudent manner. Executive agrees to conduct him/herself in a way which will be a credit to Labor Readys reputation and interests, and to otherwise fulfill all fiduciary and other duties Executive has to Company.
D. Return of Information, Records, and Materials. Executive agrees that upon the termination of Executives employment with Labor Ready or at the request of Labor Ready at any time, Executive will immediately deliver to Labor Ready all Labor Ready property, including without limitation all information, records, materials, and copies thereof in any form whatsoever, that are related in any way to Labor Ready or its business, or which are otherwise referred to in Sections I.A.5 and I.B. above.
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Executive acknowledges and agrees that unless otherwise expressly prohibited by law, Company has the complete right to review, inspect and monitor all Company property, including, without limitation, email, voicemail, and computer property of Company, and to review, inspect and monitor Executives use of the internet or other computer related transmission of information, including, without limitation, the identity and use of USB and other computer related drives. Executive acknowledges that Executive has no expectation of privacy in Companys property, including, without limitation, email, voicemail, and computer property.
E. Non-Competition Covenant.
1. Executive agrees that during Executives employment with Labor Ready and for a period of twelve (12) months (except as provided in Section I.E.3 below) following the termination of Executives employment for any reason, Executive shall not, directly or indirectly, in any Business Area, engage in, work for, provide services to, own, manage, operate, control or otherwise engage or participate in, or be connected as an owner, partner, principal, creditor, salesman, guarantor, advisor, member of the board of directors of, Executive of, independent contractor of, or consultant to, any Conflicting Organization. The restrictions in this Section I.E.1 include without limitation the solicitation on behalf of a Conflicting Organization of any Client located in any Business Area (e.g., Executive may not on behalf of a Conflicting Organization solicit a Client located within a Business Area by telephoning the Client from a site located outside the Business Area).
3. Notwithstanding anything in this Agreement to the contrary, within fifteen (15) days after the termination of Executives employment for any reason, the Company in its sole discretion may elect to extend the non-competition period set forth in Section I.E.1 from twelve (12) months to twenty-four (24) months by delivering written notice to Executive of the Companys election to extend such period. If the Company elects to extend the non-competition period to twenty-four (24) months and either the Company terminated the Executives employment without Cause as defined in the Executive Employment Agreement, or the Executive terminated employment with Good Reason as defined in the Executive Employment Agreement, then, provided that the Executive has complied with all conditions precedent to the Executive being entitled to receive any separation payments pursuant to the Executive Employment Agreement, the period during which the Executive is entitled to receive separation payments pursuant to the Executive Employment Agreement will automatically and without further action be extended from twelve (12) months to twenty-four (24) months.
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2. Executive agrees that during Executives employment and for a period of twenty-four (24) months following the termination of Executives employment for any reason, Executive shall not, directly or indirectly, engage in any conduct intended or reasonably calculated to induce or urge any Colleague to discontinue, in whole or in part, his/her employment relationship with Labor Ready.
3. Executive agrees that during Executives employment and for a period of twenty-four (24) months following the termination of Executives employment for any reason, Executive will not directly or indirectly, on behalf of himself/herself, or on behalf of any other person, entity, or organization, initiate contact with any Candidate for the purpose of employing, soliciting for employment, or otherwise seeking to employ or retain any Candidate.
1. During Executives employment and for a period of twenty-four (24) months following the termination of Executives employment for any reason, Executive shall not, directly or indirectly, solicit any Client for the purpose of providing temporary and/or permanent staffing services on behalf of a Conflicting Organization. Executives agreement not to solicit as set forth in this Section I.G.1 means that Executive will not, either directly or indirectly, for any reason, initiate any contact or communication with any Client for the purpose of soliciting, inviting, encouraging, recommending or requesting any Client to do business with Executive and/or a Conflicting Organization in connection with the provision of temporary and/or permanent staffing services.
2. During Executives employment and for a period of twenty-four (24) months following the termination of Executives employment for any reason, Executive shall not, directly or indirectly, engage in any conduct intended or reasonably calculated to induce or urge any Client to discontinue, in whole or in part, its patronage or business relationship with Labor Ready.
3. During Executives employment and for a period of twenty-four (24) months following the termination of Executives employment for any reason, Executive shall not, directly or indirectly, accept any business from, or do any business with, any Client in connection with the provision of temporary and/or permanent staffing services.
Executive represents that:
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1. Executive is familiar with the covenants not to compete and not to interfere with Clients, Candidates and Executives set forth in Article I of this Agreement;
2. Labor Ready has a legitimate business interest in enforcement of the restrictions contained in Article I, including without limitation, Labor Readys need to protect the goodwill of Labor Ready, its investment in training of the Executive, the client relationships of Labor Ready, the stability of Labor Readys workforce, and the confidentiality of Labor Readys business information and other legitimate interests;
I. Injunctive Relief; Further Remedies. In the event that Executive breaches or threatens to breach, or Labor Ready reasonably believes that Executive is about to breach, any of the covenants of Sections I.B, I.C, I.D, I.E, I.F, or I.G, Executive agrees that Labor Ready will be entitled to injunctive relief as well as an equitable accounting of all earnings, profits and other benefits arising from violation of this Agreement, which rights shall be cumulative and in addition to any other rights or remedies to which Labor Ready may be entitled in law or equity. Executive agrees that Labor Ready will suffer immediate and irreparable harm and that money damages will not be adequate to compensate Labor Ready or to protect and preserve the status
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quo. Therefore, Executive HEREBY CONSENTS TO THE ISSUANCE OF A TEMPORARY RESTRAINING ORDER, WITH OR WITHOUT NOTICE, AND A PRELIMINARY OR PERMANENT INJUNCTION ordering:
1. that Executive immediately return to Labor Ready all Confidential Information as defined in this Agreement, and any other Labor Ready property described in Section I.B above, in any form whether original, copied, computerized, handwritten, or recreated, and that Executive be permanently enjoined and restrained from using or disclosing all said Confidential Information and records;
3. that, during Executives employment with Labor Ready and for a period of twenty-four (24) months following the termination of Executives employment for any reason, Executive be enjoined from employing, soliciting for employment, or otherwise seeking to employ, retain, divert or take away any Colleague, or in any other way assisting or facilitating any such employment, solicitation or retention effort; and further that Executive be enjoined from engaging in any conduct intended or reasonably calculated to induce or urge any Colleague to discontinue, in whole or in part, his/her employment relationship with Labor Ready;
4. that, during Executives employment and for a period of twenty-four (24) months following the termination of Executives employment for any reason, Executive be enjoined from directly or indirectly, on behalf of himself/herself, or on behalf of any other person, entity, or organization, initiating contact with any Candidate for the purpose of employing, soliciting for employment, or otherwise seeking to employ or retain any Candidate; and
5. that, during Executives employment with Labor Ready and for a period of twenty-four (24) months following the termination of Executives employment for any reason, Executive be enjoined from soliciting any Client for the purpose of providing temporary and/or permanent staffing services, including without limitation that Executive be enjoined from initiating any contact or communication with any Client for the purpose of soliciting, inviting, encouraging, recommending or requesting any Client to do business with a Conflicting Organization in connection with the provision of temporary and/or permanent staffing services; and further, that Executive be enjoined from accepting or doing business with any Client in connection with the provision of temporary and/or permanent staffing services; and further that Executive be enjoined from engaging in any conduct intended or reasonably calculated to induce or urge any Client to discontinue, in whole or in part, its patronage or business relationship with Labor Ready.
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Executive hereby agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Executive failed to comply with the covenants contained in this Agreement.
J. Notice of Agreement to Subsequent Employers, Business Partners, and/or Investors. Executive agrees that Executive will tell any prospective new employer, business partners, and/or investors, prior to accepting employment or engaging in a business venture that this Agreement exists, and further, Executive agrees to provide a true and correct copy of this Agreement to any prospective employer, business partner and/or investor prior to accepting employment or engaging in any business venture. Executive further authorizes Labor Ready to provide a copy of this Agreement to any new employer, business partner and/or investor.
K. Severability. If any section, provision, paragraph, phrase, word, and/or line (collectively Provision) of this Agreement is held to be unenforceable, then this Agreement will be deemed amended to the extent necessary to render the otherwise unenforceable Provision, and the rest of the Agreement, valid and enforceable. If a court declines to amend this Agreement as provided herein, the invalidity or unenforceability of any Provision of this Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this Agreement.
B. Jurisdiction and Venue. Executive and Company hereby irrevocably and unconditionally submit to the exclusive jurisdiction of the Washington State Superior Court for Pierce County, or the United States District Court for the Western District of Washington at Tacoma, or a proper superior court or United State District Court in the jurisdiction in which Executive last worked, or where Executive is engaged in violating the Agreement. Executive and Company agree that the choice of venue lies solely in the discretion of Company. Executive agrees to submit to the personal jurisdiction of the courts identified herein, and agrees to waive any objection to personal jurisdiction in these courts, including but not limited to any claim that any such suit, action or proceeding has been brought in an inconvenient forum.
C. Binding Effect and Assignability. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party-in-interest. Executive agrees and understands that, should Labor Ready be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this Agreement as if it were Labor Ready itself enforcing the Agreement. Company reserves the right to assign this Agreement to its affiliates, an affiliated company or to any successor in interest to Companys business without notifying Executive, and Executive hereby consents to any such assignment. All terms and conditions of this Agreement will remain in effect following any such assignment. Notwithstanding the foregoing, Executive may not assign this Agreement.
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F. Attorneys Fees. Executive agrees that if Labor Ready prevails in any suit or proceeding to enforce its rights under this Agreement, Executive will indemnify Labor Ready for all expenses of every nature and character incurred by Labor Ready including, without limitation, all reasonable attorneys fees, costs and disbursements.
G. Headings for Convenience Only. The headings contained in this Agreement are for the convenience of the parties and for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
H. Survival. This Agreement shall survive the termination of Executives employment, however caused.
EXECUTIVE ACKNOWLEDGES AND AGREES THAT EXECUTIVE HAS READ AND UNDERSTANDS THIS AGREEMENT, THAT EXECUTIVE HAS BEEN GIVEN AN OPPORTUNITY TO CONSULT WITH LEGAL COUNSEL CONCERNING THE TERMS OF THIS AGREEMENT, AND THAT EXECUTIVE AGREES TO THE TERMS OF THIS AGREEMENT.
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IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties hereto have executed this Agreement as of the date first written above.
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