Employee Survival Guide® - Removing Unwanted Noncompetition Employment Agreements

Starting point is 00:00:00 Hello, this is Mark Carey, and welcome to this edition of the Employee Survival Guide, where you can learn everything your employer does not want you to know about and more. Okay, in this edition, I wanted to talk about the topic of non-competes or non-competition agreements. As employment attorneys, we see this issue happen all the time. It kind of plays out like this. Get a call, individual calls, is a potential client, and they are saying they need to get out of a non-compete because their new employer is asking them to get approval or waiver from their former employer. So we want to just talk about what the basics are of non-competes and how you can get around them. We have strategies we use routinely, but overall, let's just cut the chase of this.

Starting point is 00:00:47 Non-competes are of no benefit to the employee whatsoever. There's absolutely zero benefit to you as an employee working for a company that has a non-compete. In our office, we don't have non-competes because you can't use that for lawyers. So I just don't believe in them as a matter of practice. So the real issue is that they're used as a deterrent to impact adversely on their competitors. Again, it has nothing to do with the employee. You don't get any money for them typically, and they usually shove down your throat at the very beginning of your job. So if you have a non-compete and you want to understand more about them, it's rather simplistic in terms of the understanding. And I'll give you the copy at the end of that.

Starting point is 00:01:37 They have to be reasonable in geographic scope, meaning they can cover the United States. They can cover the state of Missouri. They can cover multiple states, even worldwide. They have to also be reasonable in their time. So one year non-competes can be held enforceable by courts, two years even. It really depends upon the facts and the circumstance of each case. And then the balancing test at the very end of the analysis that a court will go through and lawyers is really, why should we protect the employer on their non-compete and restrict the ability of a person to earn a livelihood and pay

Starting point is 00:02:14 for the mortgage, child care, or whatever issues they have? Because that's of extreme importance, especially now these days with roughly 40 million people getting laid off due to the pandemic. So I'll start with my input on that. Right now, non-compete should be stricken as a matter of public policy entirely across the country. There are several states that do not use them, and they bar them as a matter of law, statute. But they're still routinely being used by a majority of the states. And so it's an old issue that should be thrown in the trash can because it's really impacting in the ability of individuals to look for a job. They're not free agents and we want

Starting point is 00:02:57 free agency to happen. So here's the strategies we employ to get the employer to back off the non-compete issue. Number one, we get super aggressive. We actually will sue or potentially sue the employer that gave the client the non-compete. And we would draft a complaint. It looks like a lawsuit because it is a lawsuit, but we won't file it in court. the lawsuit, but we won't file it in court. We'll actually send it to the employer saying to them, if you don't back off this issue and resolve it without enforcing non-compete, we're going to sue you in court for what's called a declaratory judgment motion. And what that does essentially, a declaratory judgment complaint, I apologize, it puts the employer to the rigor of the court's analysis of why it should have a non-compete or not.

Starting point is 00:03:48 And generally employers, about 95% of the time, back away. Again, they were only using the non-compete as a device to deter the competition or the employee from going to the competition and nothing more. So it's a veiled threat that scares a lot of people unnecessarily, I would say. But fortunately, we're able to resolve those issues in favor of the employee working. The next level strategy below just threatening lawsuits and the like is trying to propose lists of employers that the company and your client, the employee wants to choose 10 named companies. And basically, you ask the employer to suggest a list of employers that they can't go work for and maybe strike a luck that no one's on that list.

Starting point is 00:04:37 That the current job offer you have is not from an employer that is on that list. So that's another strategy. The third strategy is simply wait and see. Go work for the employer and see what happens. Generally, when the employer is put on notice is when you update your LinkedIn profile or you see colleagues that's from a former employer and or vendors, they start to make remarks that they had saw so-and-so in at the employer, and then you get a little nasty letter from a lawyer hired by the old employer saying cease to assist. They will also come after the new employer in an attempt to cause the employer to terminate the new employee, which is pretty ridiculous in that sense because it's pretty obvious that the whole issue is just about harming the new competitor

Starting point is 00:05:26 and nothing to do with the employee at all. So those are the various strategies we employ to stop them. Again, non-compete should not be used at all. They restrict our ability to work, especially now during a pandemic. We need people working. We should make it a public policy issue to get rid of it at the state level. And we should follow the states that have gotten rid of it, namely, notably, California. So if you have a non-compete, talk to an employment lawyer like ourselves.

Starting point is 00:05:54 And that's it. Good luck.

Employee Survival Guide® - Removing Unwanted Noncompetition Employment Agreements

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