The Ugly but Real World of Non-Compete Agreements in PR

The term non-compete is used broadly and generally to also include non-solicit, non-recruit, non-disclosure, and confidentiality agreements. Employers often require workers to execute this type of restrictive covenant before beginning work yet, by their terms, these agreements do not actually become effective until after the employee leaves or is fired, so the breach of a non-compete often happens in real-time once an employee leaves to join a competitive company. It’s often why all hell breaks loose.

First, ask all applicants if they have non-competes. If I were the CEO of a PR firm who might also be teaching PR courses on ethics and communications at a prestigious school such as Emerson College in Boston, MA (my own personal alma mater), I firmly believe it would behoove said executive to understand ethics in business, and especially in PR, and share those teachings down the line.

?Second, check to see what law governs the non-compete.?Some states ban non-competes entirely (California, for example) but in areas like RI and MA, non-competes are drafted with the idea of an enforceable agreement including limitation to direct competition and business disruption.

1. The non-compete clause must be necessary to protect a legitimate business interest. Courts will sometimes allow the agreement if it is intended to secure confidential information, such as:

? Customer data and financial information

? Business development plans and marketing strategies, of company and clients

? Customer goodwill

? Solicitation of employees

2. The covenant not to compete must be reasonably limited as far as duration and geographic space, and no more restrictive than necessary.

3. The non-compete agreement must be in accordance with public policy.

4. Consideration: In addition, a non-competition agreement must be supported by sufficient consideration. This is a legal term that refers to the exchange of something that has value, and the requirement of consideration applies to every contract. In the context of non-compete contracts, the employment relationship itself is sometimes viewed as being sufficient consideration to enforce the agreement.

5. See if the non-compete offers and out clause. At Caster, we offer employees written approval to release them from non-competes, allowing them to join other companies including clients where the relationship has proven mutually beneficial.?

The less greedy a non-compete is, the harder they are to beat.

So, consider how key a hire the applicant is and be careful of what information the potential applicant provides your business.?You do not want to receive information that a former employer could call trade secrets. Every employee is given these documents to sign of their own free will, even encouraged to take them to personal lawyers. A non-compete is a binding agreement, and the law doesn’t appreciate the answer, “I didn’t know.” That’s a cop-out.

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