April 13, 2021

Building Your Business Case: Employment Agreements Under Scrutiny

Senate Bill 483, the Workforce Mobility Act was introduced February 25th. It proposes to prohibit employers from using non-compete agreements except in very limited circumstances. This follows years of similar consideration by Congress, regulatory agencies, courts, state legislatures and more.  This includes agreements between businesses to not poach each other’s employees. Some of those deals have resulted in anti-trust violations.

In the throes of the Me-Too movement, I saw the scrutiny shift to non-disclosure agreements (NDA). This recent article in the New York Times caught my attention.  It raises a valid point and lead me to repeat a question I often ask, “Why?”

Whether it is a non-compete, NDA, or a no-solicitation agreement – as an employer, you should understand why you want what you want.  What are you trying to protect?  In my experience, it is an employer’s genuine desire to protect proprietary interests, information, trade secrets, knowledge, skills and abilities (KSA’s) that were acquired, developed, or enhanced through benefits the employer provided during the employment relationship. I paid for you to learn a new skill or trade and would prefer that you not leave me and take the new KSA’s down the street to a competitor. I get that.

And what about an NDA provision in a severance agreement? If an employee feels subjected to some unlawful conduct, should the employee not be able to negotiate an agreement with the employer to get money in exchange for not publicizing the grievance?  Or is the potential too great for the employee to be pressured into such agreements?

This may lie at the heart of these debates at the federal, state and local levels, among legislators, regulatory agencies, and the courts.  So what’s an employer to do?  Check out the April 28th webcast, “Employment Agreements: Non-Compete, No Solicitation & Non-Disclosure” as we review the current trends, pitfalls to avoid, and proactive practices, including advocacy steps for sharing your business case with your federal and state legislators.