Unconscionable Non Compete Agreement
Finally, it should be noted that, in these latest bills, the state has an important tendency to look beyond non-competition prohibitions and to restrict or prohibit employment contracts that affect workers` occupational mobility. For example, Maine law, which does not violate competition measures, prohibits not only non-compete contracts, but all “restrictive employment contracts” defined to contain an agreement prohibiting “an employer or preventing the recruitment or hiring of workers from another employer or former employee.”  This measure is an important finding – and should be considered by other policy makers – that contracts that restrict worker mobility are not always explicitly referred to as “anti-competitive” and are not always concluded by an employer and a worker. On the contrary, different clauses in an employment contract can have the effect of a non-compete clause and, in addition, contracts between employers in a large number of contractual relationships (franchisees, subcontractors, other companies in a supply chain) may also affect the mobility of workers. Broader definitions and agreements will effectively repair the damage. However, excessive CNC can prevent an employee from working elsewhere. The English Common Law originally found that such restrictions were unenforceable.  Current jurisprudence allows for exceptions, but is generally applied only to the extent necessary to protect the employer. Most of the legal systems in which such contracts have been reviewed by the courts have been found to be legally binding by the CNCs, provided that the clause contains reasonable restrictions on the geographical area and the period during which an employee of a company cannot compete.  While the doctrine considers non-competition obligations as exceptions to the general rule, which are permitted only if they are narrowly adapted and used for legitimate reasons, it appears that, particularly over the past decade, the effective use of competitive conditions by employers has been much broader than is necessary or legally permitted. As mentioned above, two out of five workers, or 40 per cent of the workforce, reported signing a non-compete clause at some point in their careers.  It is estimated that nearly 30 million Americans are currently working under a non-compete clause. Non-competitive use is not limited to high wages. Approximately 12% of workers earning less than $40,000 per year and without a university degree are subject to non-competition obligations.  It therefore appears that a significant number of workers work under a non-compete clause which, if verified by a court, would likely be “unreasonable” and therefore legally unenforceable.