Your $9/hr Employees Shouldn’t Have Non-Compete Agreements

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Twenty years ago, non-compete agreements were a useful tool that was seldom used. Corporate leaders and insiders would have non-compete agreements. Senior executives— they would have non-compete agreements. Employees who knew all of the companies plans and secrets— they would have non-compete agreements. Scientists who knew the formula for Coke— they would have non-compete agreements. And for two reasons, this made sense.

First, these sorts of employees actually possessed knowledge of truly valuable, confidential corporate information. So it might make sense to protect that information with a reasonable, two-year non-compete agreement. But second, and equally as important, these sorts of corporate executives and high-ranking employees were well-compensated. That was part of the bargain. They worked for the company at a high level and got paid very well. In exchange, they signed a reasonable non-compete agreement to protect legitimate corporate interests.

In fact, for many high-ranking employees and executives, they received (and still do receive) additional compensation for their non-compete agreements. I have had dozens of clients who got separation packages. Essentially, they leave the company and are paid a nice sum of money to keep them out of the market for a year or two. Once upon a time, that’s how non-compete agreements worked. And it was a pretty reasonable setup.

Fast forward to 2014. It’s a different ballgame. Non-compete agreements have become ubiquitous: They are everywhere. No longer are non-compete agreements limited to corporate executives and high-ranking, well-compensated employees. Today, non-compete agreements exist at every level of every industry in all but a handful of states throughout the country. As many people have heard, Jimmy Johns – the sub shop – forces all of its employees to sign non-compete agreements.

Take a moment to think that one through. The person making your sandwich at Jimmy Johns might make $9 an hour and they have a non-compete agreement. This is beyond absurd. Trust me, I know how it happened: You have in-house corporate attorneys at Jimmy Johns – and other companies – who are not particularly thoughtful. And they think, “Everyone else is using a non-compete agreement, so we’d better use one too, just to be safe.” And then they give themselves a gold star and pat themselves on the back for being talented enough to copy and paste a non-compete agreement they found online. This would be almost laughable if the repercussions weren’t so severe. Let me unpack this.

Florida, where I live and practice law, is the most aggressively pro-non-compete state in the entire country. Florida courts routinely enforce non-compete agreements and issue injunctions. So even when you have a situation, like Jimmy Johns, where a non-compete agreement is unenforceable, it still has an impact on workers and their lives. People are scared to death of being sued for violating a non-compete agreement. And for good reason: There’s a company in South Florida called Canterbury Lampshades that sued a former employee of theirs for violating her non-compete agreement. This woman worked in their factory assembling lampshades and was paid $9 an hour.

You see, this case is a great example of the absurdity (and the immorality) of the aggressively pro-non-compete corporate culture that exists in Florida and in the country as a whole: This woman originally worked for a rival company called Allure Shades. She then went to work for Canterbury. She didn’t like it there, so she went back to Allure. But, while at Canterbury, she had signed a non-compete agreement. To be clear, she worked in the factory assembling products. She never had access to any confidential corporate information. She never had contact with any corporate clients. She does not speak English. Yet Canterbury required her to sign a non-compete agreement.

When she went to work for Allure, Canterbury’s attorney sent a cease and desist letter to Allure and the woman in question, threatening a lawsuit. The owner of Allure retained me and we sued Canterbury seeking a declaratory judgment holding that the non-compete agreement was unenforceable. The case has been going on for more than a year. Ultimately, Canterbury counter-sued Allure and sued the employee.

Folks, I understand that law is our profession. It’s our business. And we do it to make a living. But as lawyers, we have certain duties. If you are admitted to the Florida Bar, you take an oath. It’s a good oath. If you’re a lawyer and you’ve forgotten it, you should re-read it. Especially the following lines:

I will not counsel or maintain any suit or proceedings which shall appear to me to be unjust….

I will never reject . . . the cause of the defenseless or oppressed. . . . So help me God.

I know all of us have to make money and keep the lights on, but have some self-respect and some basic human decency. Have the guts to say no. Have the guts and the moral fortitude to tell a client or prospective client, “No, I’m not suing a $9 an hour factory worker or cook or fast food worker over a bogus non-compete agreement. I’m not even willing to write a cease and desist letter, ‘Just to scare them.’ I can’t help you and have to decline this representation.”

You might lose some business and a little bit of money, but you’ll sleep better at night and you’ll have your self respect.