Interesting Article

Interesting Article

Marcus Boren, B.Sc., C.P.

8/19/2002

Hi Everyone,

I ran across this article today, and thought it would be interesting
reading for the list members.

Any thoughts on this?

Marcus Boren, CP


Signing non-compete agreements for fun and profit

Companies love to have new hires sign non-compete agreements (NCA's),
wherein the employee agrees that if and when he leaves the company, he
will not join a competitor or compete with the company for a prescribed
period of time.

The prospect of signing an NCA worries most people, and it should. An
NCA can prevent you from working in your field and it can cost you a lot

of money in lost income.

There are many tactics you can use to limit the effects of an NCA,
including restricting the time period and the geographic area to which
it applies. But, I've got a better approach that startles most
companies. Try it when you negotiate your next NCA.

Recognize that signing an NCA costs you money and confers a benefit on
the company. For the deal to be fair, the NCA should cost the company
money, too, and it should confer a benefit on you.

If a company wants to restrict your ability to earn a living, it should
give you something in return: a guaranteed severance package for the
term of the NCA, to tide you over while you're out of work and not
competing. The severance should be yoked to the terms of the NCA. That
is, if the NCA applies whether you quit or are fired, then the severance

should be paid in either case. This is a deal that shows good faith when

the company hires you.

It's no fun to be left holding the bag when you leave your job. If a
company wants to lock you out of the market, it should compensate you
for it. What I'm suggesting is a win-win approach to NCA's that forces
the employer to put some skin in the game.

When it has to pay for the benefit of an NCA, a company will think
carefully before asking you to sign one.

Let's make sure there's fun and profit for everyone in NCA's.