Marquel, TPVs NYTimes Competition correspondent was rope jumping when he came across Noncompete Clauses Increasingly Pop Up in Array of Jobs. Once largely limited to the technology and sales sectors, the agreements are entering a range of fields; even camp counselors and hairstylists are being required to sign.
Noncompete agreements are supposed to prevent employees from learning their boss’s secrets (technically less than trade secrets) and then go out to compete with them, unfairly using that information against them. But there is supposed to be a balance to it. The training the employee gets is supposed to be worth the small time of noncompetition required by the agreement (courts have said such agreements have to be short term).
Camp counselors don’t learn secrets and receive no special training. The same is true of hairstylists. So what’s with the noncompete agreements? It’s very simple and something Marquel’s known ever since he joined the work force and started giving lectures at most of the Ivy League business schools in the country.
Quite simply, every businessperson wants a monopoly. A noncompete agreement accomplishes that in part. A patent even more so. The secret to American business is to prevent competition, legally or not, and end up with a monopolistic advantage.
But what’s with the growth of the noncompete? They used to be tools suggested by technical lawyers that a businessman would never have thought of on his own. This required investigation. Marquel went downtown to lawyerland.
I found one of the most active noncompete lawyers in the city and asked him about the camp counselor.
“That’s an easy one,” he said.
“Easy?” I asked. “I would have thought it’s indefensible. Defend it.”
“Secret handshake.” he said simply.
“That’s it?” I asked.
“No,” he said, “but that’s the start of it. There are countless secrets they learn that an employer might prefer not known generally.”
“Well, employers might have a lot of preferences that society doesn’t want generally, ever think about that? Why does the employer’s preference trump?” I asked.
“Without employers, we wouldn’t have an economic system.” He said.
“Without employees free to choose the job of their choice, we wouldn’t have an economic system either,” I retorted.
“Well, I guess we can agree to disagree.” He said.
“Like hell,” I said. “What about the funeral director assistant. I heard you were putting the clauses in their contracts.”
“That’s true,” he said. “Funeral directors have to eat, too.”
“And why can’t their assistants go out and get another job if they want?” I asked.
“Secrets,” he said.
“Like what?” I asked.
“I can’t say. It’s a sensitive subject,” he said.
“So we’re supposed to take you at your word that somehow these assistants are so full of specific information that it would be unfair to let them work for another funeral parlor?”
“Sure. Think about it,” he said
“Believe me, I have.” I answered.
“Plenty of people go to a funeral parlor because they like the results,” he said.
“And the assistants are what the families shop for? They say, ‘I want the assistant that prepared Uncle Jimmy.’ Are you nuts?” I asked.
He was silent.
“Okay,” I said, what about the guys at the bagel shop.”
“Oh, yes,” he said, “they are all subject to noncompetes. The owner can’t afford to go looking for new help all the time. This saves time. They all stay with him.”
“But that’s exactly what a noncompete clause is not supposed to be for. It’s not to make it easier for the employer, but prevent unfair competition. What’s unfair about a guy who rings up a bagel sale going to a competitor and ringing up their bagel sales?”
“You don’t understand business,” he said.
“I think you’re right. I’ll have to change my lectures.” I said, “tell me about the bank clerks. I’ve heard you’ve got them all locked up too.”
“Money,” he said, “their jobs are all about money. We can’t have them wandering around looking for jobs. Especially when they already have good jobs.”
“You think a noncompete is going to prevent embezzlement?” I asked. “I’ve never heard anyone suggest such an absurd result.”
“These are banks,” he said. “Zero tolerance. Plus, who told them to sign. This is an agreement. Both parties agree.”
“You know as well as I,” I suggested, then added, “well perhaps you don’t know, that the Supreme Courts and all lower courts have rejected that kind of reasoning when there is such a disparity of bargaining power and where it involves an important interest, in this case, the interest in furthering an employee’s career.”
“Well,” he said, “I don’t know about the Supreme Court because we keep winning in lower courts.”
“Those are called stupid courts, not lower courts.” I said. “That’s why they’re lower.”
“I never heard those terms in law school,” he said.
“You’re not likely to.” I said. “Just tell me, don’t you feel guilty telling these people they can’t work for a whole year, which for most of these people is like saying they can’t work at all, if they want to work at a nicer place, or a place with better benefits, or a place that treats them better? Doesn’t it affect you?”
“I’m just the lawyer,” he said.
I decided to leave just the lawyer. Mr. Just-the-lawyer. In a way he’s right. He’s just the lawyer. Nobody said he had to have brains or a conscience. He’s just the lawyer.
We don’t have high expectations for just the lawyers any more. It’s not surprising.
BY MARQUEL: Mr. Just-the-Lawyer