Non-compete agreements: striking a fair balance

On Behalf of | Oct 31, 2016 | Employment Litigation |

Say that you’re a high-ranking executive in a cutting-edge department of a profitable enterprise, tasked with developing new products and processes and, concomitantly, safeguarding your employer’s vitally important trade secrets.

Should you be able to just terminate your employment and walk across the street to a business rival and fully apply all your talents and energies in the same way you did for your now ex-employer?

How about this hypothetical. You make sandwiches for a franchise eatery. A similar establishment down the road offers you better pay and benefits for doing essentially the same work. Should you be able to take the new job and fully apply all your sandwich-making knowledge at the new digs, or should your ex-employer have a legal right to stop you from taking that position?

Thus is the realm of the non-compete agreement, which unquestionably marks a type of slippery slope in the business world. Most people would reasonably agree that an employer should have some protections against select workers — key employees — summarily bolting to a rival and divulging everything they learned at their previous job. Trade secrets might be divulged.

In the case of a sandwich maker, though, wouldn’t it be against public policy and flatly unlawful for a former employer to seek to enjoin an ex-employee from making a living elsewhere?

Non-competes require a careful balancing and analysis in every instance, a fact which is readily acknowledged in a recent communiqué written by a federal government attorney.

On the one hand, companies often have a legitimate and even compelling need to limit some employees via a non-compete agreement. Conversely, when taken too far, such a contract can flatly injure a worker and his or her family, as well as stifle entrepreneurship and the growth of new businesses.

The argument is made in the above-cited article that non-competes can be overly heavy hammers in workplace agreements and should thus be “the exception, rather than the rule.”

Again, that needs to be assessed on a case-by-case basis. A proven business attorney with experience representing both employers and workers in employment law matters can provide candid and on-point guidance in a given case.

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