If
you thought that non-compete clauses where only to be found in areas
like technology or sales you are wrong. non-compete clauses are now
everywhere.
Non-compete
clauses are appearing in far-ranging fields, beyond the worlds of
technology, sales and corporations with tightly held secrets, where
the curbs have traditionally been used. From event planners to chefs
to investment fund managers to yoga instructors, employees are
increasingly required to sign agreements that prohibit them from
working for a company’s rival. But what are the advantages of
non-compete clauses?
Backers
of non-competes states that they help spur the state’s economy and
competitiveness by encouraging companies to invest heavily in their
workers. Non-competes are also needed, supporters say, to prevent
workers from walking off with valuable codes, customer lists, trade
secrets or expensive training.
On
the other side, we have the employees. For example Daniel McKinnon,
who is a hairstylist in Norwell, Mass. He lost a court battle with
his former employer who claimed that Mr. McKinnon had violated the
terms of his agreement when he went to work at a nearby salon.
Shortly after being fired, McKinnon started to work at a nearby
salon. But a judge issued an injunction ordering him to stop working
at his new employer. And so he lost his truck and his apartment.
Another example: imagine if a few employees have an innovative idea
and their bosses don’t want to pursue it. Normally they can leave
to found a start-up. But, if employees with non-competes bring that
innovative idea to their boss and it is rejected, they are stuck or
they would have to leave the company and wait a year before they
could pursue their new idea.
The
United States has a patchwork of rules on non-competes. Only
California and North Dakota ban them, while states like Texas and
Florida place few limits on them. So, the question is, is it better
to save the secret of a company or the liberty of the employees and
within their livelihood?
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