Over the weekend, The New York Times ran a surprising (at least to me) article about how Idaho has implemented a legal framework that gives employers a great deal of flexibility in an area getting a good deal more publicity of late: Non-compete agreements. (H/T to a post by Suzanne Lucas in Inc. too.)
When everyone has a non-compete agreement, what problems does that cause? Lots, according to the article:
For the most part, states have been moving toward making it easier for people to switch teams, but Idaho went the other direction with legislation that was friendlier to employers. The resulting law was particularly strict because it put the onus on employees to prove that they would not harm their former employers by taking the new jobs.
Proponents note that the statute applies only to “key employees” who tend to have more responsibility and better pay. But employment lawyers say Idaho companies tie down all levels of workers, not just top executives, with tough employment contracts.
Contrast that with California, which bans nearly all types of non-compete agreement, and lately, Massachusetts, and suddenly, Connecticut’s laws on non-compete agreements look downright moderate.
Indeed, for now at least, Connecticut employers have a good deal more flexibility on non-compete agreements that in other areas of employment law.
In fact, I was reminded of this when I looked back on a post from 2014 that noted the same thing — also in response to an article from The New York Times. It seems back then, the newspaper was also bemoaning the increasing use of non-compete agreements. Hmm.
In any event, employers in Connecticut should be mindful of this edict from the courts from 40 years ago that still rings true today:
In order to be valid and binding, a covenant which restricts the activities of an employee following the termination of his employment must be partial and restricted in its operation “in respect either to time or place, … and must be reasonable—that is, it should afford only a fair protection to the interest of the party in whose favor it is made and must not be so large in its operation as to interfere with the interests of the public. The interests of the employee himself must also be protected, and a restrictive covenant is unenforceable if by its terms the employee is precluded from pursuing his occupation and thus prevented from supporting himself and his family.