non-compete agreement

Posted: October 14, 2014
By: Clay Cerny


I like Jimmy Johns’ sandwiches, but I will never eat them after what I learned today. Why? They treat their employees badly. Raw Story reports (based on a story from Huffington Post) that every employee who works for the company signs a non-compete agreement that would prevent them from working for an sandwich maker for two years. I’ve written about non-compete agreements before. Once upon a time they were a tool used to keep key performers from jumping to competitors. Those employees usually received some kind of compensation that would let them wait out the term of the agreement. Now companies like Jimmy Johns are using non-compete agreements to make it difficult for employees to leave their job. That’s wrong. I will never at Jimmy Johns again

Posted: September 15, 2014
By: Clay Cerny


A client called me with good news last week. He had received a job offer to work as an assistant at a doctor’s office. His voice didn’t sound good, so I asked what was wrong. He told me that he didn’t want to sign an employment agreement. The language scared him. He sent a copy to me, and he had every reason to be afraid.

The business manager told my client it would be a full time position with benefits. The employment agreement said something very different. It stated that the employee would work when the business manager said work was available. If work was slow, he could be sent home or have a day cancelled. The employment agreement also contained a non-compete agreement that limited my client from working with a 15 mile radius of the doctor’s office for a period of 18 months. This clause would limit my client’s ability to find work close to his home. He asked the business manager if this language could be changed. She told him not to worry about it. She said that they just get this form signed to make the lawyers happy.

My client talked to a lawyer who warned him not to sign the agreement and keep looking for another job. I agreed with this advice. This kind of agreement is all one way. When there is work, the employer expects the employee to come in and do a good job. If there is no work, the employer saves the cost of paying employees. All the risk is borne by the employee. The non-compete is often used by such employers to keep employees from leaving.

Be careful. Only sign an employment agreement after you have read and understood it. If you have any doubts, ask your prospective employer to let you take the document and think about it for a day. Anyone who tries to force you to sign the document and take the job right away is clearly trying to trick and control you. Don’t be fooled. Take the time to know what you are signing.

Posted: August 23, 2014
By: Clay Cerny


I’ve written in the past about the danger of signing non-compete agreements. A client recently told me a new tale of non-compete woe. He was working in a technical position for a company that was sales focused. My client’s position had no function related to sales, so he could not steal any accounts or clients. He applied for a job with a company that purchased from his current employers. The hiring manager informed my client that they would love to hire him, but could not do so because of the agreement he signed. In most cases, non-compete agreements last for one year. The one my client signed lasts for 18 months. There is currently a position open at the company that wants to hire him, but he will not be free for another four months. He has lost two opportunities to work for a company that wanted to hire him.

If you are taking a new job, think carefully before signing any non-compete agreements. In a profession with limited opportunities, a non-compete agreement could keep you from working. If you don’t understand what an employment document is saying, take it to a lawyer before signing it. Be very careful before signing any employment document. Don’t limit your future.

Posted: August 12, 2014
By: Clay Cerny


When we’re terminated or laid off from a position, we often feel anger or shame. That’s natural. However, those feelings can lead us to do things we will later regret. If an employer offers any kind of incentive, read the document carefully and know what you are signing.

One of my clients works in a specialized industry where there are few employers and limited opportunities to work. When her employer let he go, he offered her a month’s salary and a month of paid healthcare. All he asked is that she sign a piece of paper. Luckily, she read the agreement, which included a non-compete clause that would have made it impossible for her to work for any company in metro Chicago. My client weighed her options and walked away from the offer.

If you are in this position, read the document carefully. If you don’t understand it, inform your employer that you want to have time to review it. If the employer pressures you to sign it immediately, there is probably something in that document that he does not want you to understand. Have the document reviewed by a lawyer who understands employment law. Don’t let yourself be bullied into signing something that can hurt your ability to get a job. Know what you are signing

Posted: May 11, 2014
By: Clay Cerny

Two of my clients are facing problems with their current employers.  In both cases, the clients -- let's call them Mary and Bob -- neglected to read employment documents before accepting a job.  Mary works in education as a administrator.  She was recently laid off with no warning.  To make matters worse, she was informed that the employer would not be paying her final check or vacation pay because she had signed a form calling her initial pay during a probation period a "loan" which the company would collect if the employee was terminated.  I've never heard of such a thing in the 13 years I've been working as a career coach.  However, I believe Mary told because she the story in a convincing manner and says she has a  lawyer helping her.  The problem is that even if she gets the pay she deserves, a good part of it will go to her attorney.  Had she read her employment agreement before signing it, Mary could have asked to have this clause removed or she could have chosen to work for another company.

Bob has an even trickier problem.  He works in a very specific area in IT.  When he graduated from college in 2009, it was difficult for a new graduate to find a job.  Bob joined a company that required him to sign a non-compete agreement.  This means that he cannot apply to the companies that would be most likely to hire him.  Bob was so excited to get an offer that he didn't notice the non-compete agreement, which lists 10 specific companies that he cannot work for in any capacity.  The good news is that Bob thinks he can get a job in consulting that would led him fill a function not covered in his employee agreement.

These examples demonstrate the importance of reading anything given to you by a potential employer.  If you don't understand something, ask if you can have it reviewed by a lawyer.  Any employer who will not let you do this is probably trying to manipulate you.  A good employer will have nothing to hide and will welcome a review.  Before accepting any job, remember this simple principle:  Read before you sign.

Posted: August 22, 2012
By: Clay Cerny

One of my clients is fairly new to the job world.  He’s transitioning from a small, family-run business to a career in sales.  He recently accepted a job offer and signed a document call “Terms of Employment.”  No big deal, he thought.  Then he got an offer from another company, a better offer.

He asked me what he should do.  I asked if he signed a non-compete agreement, which confused him.  He had never heard of such a thing.  I looked at the terms of employment, which did contain a rather restrictive non-compete agreement.  I’m connecting my client with a lawyer who thinks the agreement is not valid.  However, the bigger problem is that is exists at all.

Courts are giving more authority to companies to lock workers into non-compete agreements.  Before you sign any kind of job document, read it carefully.  If you don’t understand the document, take it to a lawyer.  Once upon a time, non-competes were meant for elite employees who were very well compensated.  Now they are one more tool that a boss can use to beat down a worker.

If my client’s non-compete holds, he would be very limited in where he could work for 18 months.  He isn’t an elite skill employee, just a sales guy.  There is no reason to lock this kind of employee into a non-compete.  The problem is that he signed the document.  Take a lesson and beware of any kind of contract or agreement that will limit your ability to get a new job.

Posted: February 4, 2011
By: Clay Cerny

Writing in the Chicago Reader, Christopher Flores recounts his experience almost applying for a job as a writer with Groupon.  Flores decided not to apply when he learned that he had to sign a non-compete agreement before he was hired.  Other writers cited in the article signed the document because they were desperate for work.  The document stated that a writer could not work for a “competitor” for two years.  An earlier version of the agreement was for an “indefinite” period.

The consequences for a worker who signs such an agreement can be severe.  An employment lawyer cited in the article says that it cost thousands of dollars to fight the legitimacy of such non-compete agreements.  It also says that courts are leaning even more in favor of defending the employer’s rights against those of workers.

Groupon no longer requires applicants to sign a non-compete, but said they might do so again in the future if the company’s needs change “down the road.”  The bottom line for working people is to beware of any kind of contract.  Think about what this article says: A job seeker could sign an agreement with a prospective employer that blocks employment from any kind of “competitor” for an “indefinite” period. Like most things in America today, the deck is stacked – against working people.