Unfair Non-Compete Agreement

In 2016, Jimmy John`s sandwich chain made headlines by agreeing to no longer force its workers to sign anti-competitive agreements by comparing it with the attorneys general of New York and Illinois.1 The case has surprised many labor lawyers. It is common knowledge that companies, anxious to protect corporate secrets, often require CEOs and top talent to sign agreements to join non-competing companies for a period of time. But Jimmy John has asked low-wage sandwich makers – workers who probably don`t have valuable business secrets – to agree not to work for competing sandwich shops until two years after the end of their work.2 It`s also important to know how long the employee will be limited. The more the agreement is intended to prohibit competition, the more likely it is that it is unenforceable. In our example, the employee was prohibited from competing directly during the employment and for a period of two years after the employee`s departure. A period of six months to three years is the typical period that is considered in non-competition agreements and is generally applied. As a result, non-poaching agreements could affect millions of workers. In a report for the International Franchise Association, IHS Markit Economics estimates that franchised workers in the United States employ 7.9 million workers in 2017.45 In addition, Colorado and Oregon laws attempt to limit the proportion of workers a company can demand to sign a non-compete clause. Under Oregon law, a non-compete agreement can only be applied if employees work in administration, management or profession.80 And Colorado limits the ability of employers to enforce these agreements to „executives and executives, as well as employees who constitute professional staff for executives and executives.”80 And Colorado limits the ability of employers to apply these agreements to „executives and executives as well as employees.” who represent professional staff for executives and executives.” 81 These executives are more likely to negotiate such agreements before entering into the contract and leaving the company. In August 2018, the governor of Massachusetts signed a law that aims to prevent the excessive use of non-compete bans. The law, which applies to agreements reached on October 1, 2018, limits the use of non-competition obligations by another important point, since the nature of the restrictions imposed depends on the situation and each situation is different. What is considered reasonable in one context may not be in another. For example, if the employer was working in a very small sector with few competitors, it is likely that a court would not impose a broad geographical limitation or a long time limitation, as it would be virtually impossible for the former worker to find employment in the same sector.

The courts do not want to impose agreements that make it too difficult for people to work and earn a living in areas where they have experience. States should enable workers to defend themselves and strengthen the ability of law enforcement authorities to protect workers by requiring firms to divide all non-competitive requirements for vacancy notices and job offers; setting significant penalties for the use of illegal non-competition measures and anti-poaching measures; The designation and funding of agencies responsible for the enforcement of these cases; and enable workers to sue companies that violate their rights.

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