Employers Sometimes Ask Workers to Sign a Non-Compete Agreement

If you are working, or considering accepting a job that pays an hourly wage below $15.00 an hour, serve tables for tips, or even earn a modest salary, you may want to reconsider signing a covenant not to compete, or better known as a non-compete agreement. Whether a prospective employer suggests you sign one in order to get the job, or a current employer asks you to sign one before a promotion, it is important to understand the ramifications of signing, if your employment with the business ends.

Non-compete agreements prohibit former employees from working for a competitor of the original employer. Most courts will enforce a non-compete agreement if it protects a legitimate company interest and the employee received consideration. The time and territorial limitations are important, so read that part carefully.

There has been a growing trend for employers of low-paid employees to require their employees to sign non-compete agreements. In the past, it was only common for highly skilled employees to be asked to sign a non-compete agreement but these days, a person working in a warehouse, flipping burgers, or making sandwiches might be just as likely to be confronted with one. This trend should be alarming for employees and employers alike.

Low-income earners who sign non-compete agreements are taking the risk of limiting their job prospects if they part ways with their employer. Even if you decide to take the chance that your former employer is not going to enforce the agreement, you will always be peering over your shoulder in hopes that he doesn’t sue you. If the employer does try to enforce it, you will soon find yourself out of another job unless you are able to fight his right to enforce it. Even if you believe the business will not enforce the agreement against you, it is worth taking the time to reflect on the agreement before signing your name on the line.

Employers who employ low-income earners and are considering asking their employees to sign non-compete agreements, should also consider the consequences of doing so. The low-income employee is already not thrilled about the paycheck and the stress of trying to pay their bills. It makes little sense to increase his or her discontent. A happy employee is a productive employee. You may have the unpleasant experience of defending the business and explaining why it insists on handcuffing a low-earning worker. Even if the business has no intention of enforcing the non-compete agreement, you may feel the public backlash just like Jimmy John’s is now feeling!

If you have any questions regarding a potential or an existing Non-compete Agreement, contact me or an attorney experienced in employment rights law.