How Some Employers Are Taking Non-Competes Way Too Far
A recent New York Times article entitled "When the Guy Making Your Sandwich Has a Non-Compete Clause" highlights how employers are increasingly compelling their low-level, minimum-wage earning, employees - yes, even deli clerks - to sign non-compete clauses that purport to bar them from working for a competing business.
We're not talking about high-level executives with the secret formula to Coca Cola being prevented from taking that to Pepsi.
There are a number of challenges that this practice poses, and, I would argue, will lead to worse results for employers before the courts.
First, even if the non-compete provision wouldn't be enforceable in a New York court - and chances are that it would not be upheld for low-level employees like the sandwich maker in this story - it is highly unlikely that the employee has the financial wherewithal to fight a lawsuit brought by his former employer. In other words, he probably can't afford to defend his right to seek a better job.
Second, and in a parallel vein, courts know this. And, if they think that employers are overreaching and punishing otherwise loyal employees, the courts will, over time, be less sympathetic to protecting employers' interests, and will look for ways to invalidate the non-compete - even in cases that are closer calls.
Final Thoughts on Employers Taking Non-Competes Too Far
A more rational, balanced approach would be to allow these employees the freedom to go where they want - provided they don't actively solicit or poach any other employees or current customers of the business. And that is far more likely to be upheld because an employer, generally speaking, has a legitimate interest in protecting his employee roster and clients.
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