Your First Non-Compete Agreement

I have little doubt that many of you, at some point in your careers, will have to sign a non-compete agreement. This is a fairly obvious observation since many of you are/will become big time players, and big time players have access to very important information that companies will want to protect. At least that was the traditional use of a non-compete agreement. Over the past six months or so, I've seen a steady stream of articles detailing the small time players, very small time players, signing non-competes. Some examples lend themselves to an obvious explanation, Jimmy Johns for instance, probably utilizes non-competes to better control their work force's bargaining power, as the agreement everyone signs - noted in an AJA piece - is particularly harsh:

For two years, [the non-compete agreement] forbids former employees from working for "any business which delivers more than 10 percent of its revenue" from sandwiches if that business is "within three miles" of a Jimmy John's store.

That's a pretty dick move on behalf of Jimmy John's; there's nothing their store workers know that any WSO monkey couldn't figure out by watching them make a sandwich or two. But, I'd be surprised if that's why they had such an agreement in place. Jimmy John's seems more clever. However, it appears that there are firms who utilize a non-compete for entry level workers because they actually think their information is worth protecting, as noted by the NYT:

Joe Kahn, Linx's owner and founder, defended the noncompete that his company uses. "Our intellectual property is the training and fostering of our counselors, which makes for our unique environment," he said. "It's much like a tech firm with designers who developed chips: You don't want those people walking out the door. It's the same for us." He called the restriction - no competing camps within 10 miles - very reasonable.

Linx is a summer camp. I challenge you to think of a firm that has less in common with the semiconductor industry.

What do you monkeys think? Has this gone too far? Or where everyone needs to read their employment contract carefully and be prepared to walk?

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