A recent Non-Compete Article in the New York Times highlights a growing danger for American workers: restrictive covenants like non-compete and non-solicitation provisions. These “non-competes” as they are known in labor/employment law parlance have trickled down to jobs – such as sandwich maker, factory manager or even laborer – which had never previously been burdened by restrictions on job mobility. As the article points out, in most cases, non-competes are foisted upon workers after they have accepted the job, when they are unable to negotiate effectively. In many of these cases, non-competes serve no useful purpose toward an employer’s objective of protecting its intellectual property or competitive advantage. Nonetheless, even if the non-compete is overbroad and overly lengthy, the threat of litigation can chill an employee’s ability to change jobs. Being precluded from taking a new job, sitting out of the job market until one’s non-compete expires, or paying legal fees to fend off a lawsuit can cause tremendous economic damage.
Accordingly, in an employment environment where non-competes are increasingly common up and down the employment ladder, it pays to be very wary of the fine print, such as non-competes, in employment agreements.