When considering a job offer, applicants should consider what could happen if they leave that job. Non-competition and non-disclosure agreements are being used with more frequency in employment contracts and severance agreements, especially in technology-oriented professions.
Non-compete agreements take away rights
American workers often relinquish rights and face disadvantages negotiating the terms of their new jobs. Employment contracts containing non-compete clauses are being used not only for high-tech or executive jobs, but in work at every level of skill, education and wages.
Potential problems with non-disclosure agreements
Non-disclosure agreements have appeared in news reports on political scandals and sexual misconduct. NDA agreements are also being used with more frequency in employment contracts and may pose problems for employees. A NDA, or confidentiality agreement, is a legally-binding contract that prohibits the signer from disclosing sensitive information. Substantial financial penalties, as high as $25,000 to $750,000, may be imposed for each breach of these contracts.
Non-compete agreements for current employees
Some employers try to have new or prospective employees enter non-competition agreements before hiring. However, they may also have existing employees enter a non-compete clause in new employment contracts. Employers offer these agreements to avoid disputes over employment terms and to protect themselves after a worker leaves or is terminated. Businesses may rely on non-competition clauses to assure that a worker does not disclose confidential information after they leave that employer or use this knowledge while working on their own or for a competitor.
Federal noncompete bill introduced
A noncompetition agreement can prevent a person from seeking more lucrative and satisfying employment. However, these consequential clauses may have been contained on one form or box that was checked without meaningful review when employment contracts were signed. A federal bill may help some workers but has serious drawbacks.
Employers may cash in on side hustle
Employees may use their free time to seek profit from their interests or hobbies by writing a book, developing a new video game or making pottery or jewelry. Social media and the internet almost limitlessly expand the opportunity to market these side hustles and performing other outside work such as blog writing. Employees need to carefully review existing employment contracts and negotiate updated agreements to deal with these activities.
Things to know about noncompete and nondisclosure agreements
Noncompetition and nondisclosure agreements are becoming more prevalent in many businesses and professions. Potential or current employees should pause and carefully consider these clauses when they are offered in an employment contract or at another time.
Getting around forced arbitration
For almost 20 years, forced arbitration agreements have been buried in legal verbiage in employment agreements requiring employees to submit to binding arbitration for disputes and taking away their rights to go to court. Despite many court cases upholding arbitration agreements, there are still many ways to contest these clauses in employment contracts.
Employment contracts have benefits
Receiving a job offer is the time to consider job security. While employment contracts are considered mostly beneficial for employers, they can also provide a safety net, which sets forth the employer's obligations concerning salary, benefits and other important matters.
Pennsylvania considers ending non-compete agreements
Pennsylvania now enforces non-competition agreements if certain conditions are met. A bill pending before a state house legislative committee, however, would severely restrict their use. This could change the circumstances for negotiating employment contracts.
