Noncompete clauses are only appropriate in some circumstances

Some employees have contracts that they are bound by when they accept a job. These employees should make sure that they comply with the conditions of the contracts. Employers must do the same thing.

One contract type that is important for businesses is one that includes a noncompete clause. This clause prevents the workers from working with a competitor of the business for a specific period of time. While this makes sense from a business standpoint, there are some issues that are coming to light.

In the past, the noncompete clause was associated with white collar workers. More recently, even blue collar workers are finding that they are bound by these clauses. This is where the issue comes in.

Blue collar workers usually have to show that they have experience if they want to get hired for anything other than minimum wage, bottom floor work. A noncompete clause can mean that they can’t do what they are accustomed to doing and what they have training to do.

For employers, the point is simple. They don’t want any employee going to another company and sharing information about their company with the competitor. But, how much could someone who makes sandwiches for a living damage an employer if they leave to work at another fast food restaurant? This was the issue at the center of a lawsuit against Jimmy John’s last year when it came to light that their workers, including sandwich artists, had to sign one of these agreements.

Employees who sign noncompetes should make sure that they understand what the clause contains. If they breach this contract, they might find that they are facing legal action and the loss of the job that led to the breach of contract claim.

Source: The New York Times, “How Noncompete Clauses Keep Workers Locked In,” Conor Dougherty, accessed July 14, 2017