Book Opener

Promising Not to CompeteEmployers in businesses that involve specialized skills will sometimes askemployees to sign contracts not to compete. A non-compete contract relies on apromise by the employee to refrain from working for a direct competitor for acertain period of time after the employee leaves the company. Non-competecontracts have obvious advantages for the employer. However, they can alsopresent severe disadvantages for an employee, especially if an employeeworks in an area with limited work opportunities.Courts will not uphold non-compete contracts if they place unreasonableburdens on a person’s right to earn a living. Such clauses may be foundunreasonable if they last for too long or cover too wide a geographic area.Nor will a non-compete contract be upheld if the type of business activity that itcovers is too broad.When asked to sign to a contract not to compete, it is wise to negotiate theterms so that finding employment after leaving the company is not too difficult.Negotiate Can you think of some negotiating strategies that an employee coulduse to lessen the burden of a non-compete contract?Money as ConsiderationUsually, one party will offer money in exchange for another party’spromise or performance. Unless price limits have been placed on certaintransactions by administrative regulations, legislative fiat, or executiveruling, the parties are free to exchange any amount of money that theynegotiate. In the past, the price of such things as rent, fuel, oil, andnatural gas have been controlled by the government. Similarly, employersmust follow certain pricing regulations set by the government,such as the minimum wage rate established by the federal Fair LaborStandards Act.Property and Services as ConsiderationBefore money was accepted as a medium of exchange, it was commonto use property and services as consideration. Some parties stillprefer to engage in barter agreements that involve goods and servicesrather than money. For example, a promise by one comic book collectorto another collector to exchange an issue of The Uncanny X-Men ® for anissue of The Fantastic Four ® would represent a valid agreement.Chapter 8: Consideration 167