On MSNBC today, contributor Eve Tahmincioglu talks about the pros and cons of non-compete agreements--mainly the cons. A non-compete agreement is a pact between you and your employer in which you agree that, if you leave the company, you won't go to work for a company in the same line of business for a specified period of time. It is often one of the forms you are asked to sign when you start work with a new company.
Companies in competitive scientific and technology industries often ask new hires to sign non-compete agreements. An employer may consider the knowledge behind its marketable goods or services its competitive edge; the non-compete agreement prevents another company from hiring away a staff member--and their knowledge.
Tahmincioglu recommends that new hires resist signing non-compete agreements because, she says, they make it difficult to change jobs within the industry or to start a new business in the same field. Worse, some non-compete agreements are written so that you are bound by the agreement even if the company lays you off.
In a tough job market--like the one we're in now--new hires will be tempted to sign these agreements even if they hurt their long-term interests. Tahmincioglu offers a few ideas that may give new hires a little more flexibility.
First, know what you're getting into. Check with your state's labor department or an attorney on the legality and scope of non-compete agreements. According to attorneys quoted in the article, courts in different states interpret non-compete clauses differently. Florida courts, for example tend to side with employers, while California is friendlier to employees.
Second, don't be afraid to suggest alternative language. The article suggests narrowing the scope, for example, so you might have a chance at landing a job at a company in a related but not competitive industry. Tahmincioglu says the employer may say "take it or leave it," but who knows? You won't know if you don't try (tactfully, of course ... it is your first day on the job after all).
Third, if you are laid off by the company and stuck with its non-compete agreement, try and negotiate lifting the agreement as part of your severance package. Here again, check what the law allows in your state or city; a layoff may negate being held to a non-compete agreement. You may have more success escaping the non-compete agreement when leaving a company than when entering it.