Employment Law Blog

Many employers require employees to sign non-compete agreements that prohibit them from starting new employment with a competitive business, starting their own competing business, or even providing similar services for a finite period of time, within a specific geographic area, or that subject them to other similar conditions once their employment ends. Studies have shown that non-compete agreements are harmful for workers, preventing mobility, weakening wage growth (by restricting an employee’s ability to leave for a higher paying job), and limits the starting of businesses. Non-compete agreements have become increasingly common in recent decades, with between 30-60 million American private-sector workers subject to these restrictive covenants.

When it comes to the process of finding a new job, negotiation is one of the most tenuous areas for many employees. Many employees have anxiety around asking for “too much” while still getting a fair offer, and this can give employers the upper hand during these conversations. While many people focus on salary and other economics, more employees are using the negotiation stage to ask for other perks.

In recent years, many companies have asked new and continuing employees at all levels to sign non-compete, non-solicitation, and non-recruitment agreements. Sometimes, these restrictive covenants are part of a carefully negotiated employment agreement for an employee managing sensitive or valuable projects. Often, however, these agreements are boilerplate clauses tucked into hiring documents that a new employee may not understand (or even read).

When a worker is subject to restrictive covenants and tries to leave employment and get another job in their field, they may find themselves defending against threats of legal action by their former employer. Workers who are laid off indefinitely or terminated due to the COVID-19 coronavirus may be unpleasantly surprised to find their previous employer attempting to enforce restrictive covenants and prevent them from working for competitors, or worse, a wider range of companies.