Want to Get Out of Your Non-Compete Agreement?

EARN’s new tactic helps non-supervisory coworkers escape their non-competes together BEFORE changing jobs. See our Media Coverage and FAQ below for details.

Media Coverage

The End of the Noncompete Clause – Harvard Business School Alumni Bulletin  •  Abolishing Noncompetes — One Company at a Time – IEEE-USA InSight  •  Eliminating Noncompetes One Employer at a Time… – OnLabor  •  New York Times  •  BostInno   •  Computerworld  •  Financial Times non-compete agreement

FAQ for non-compete agreements

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What is a non-compete agreement?

Many employees include non-compete clauses in the employment agreements that their employees are required to sign. A “noncompete” prohibits or restricts an employee from working for a competitor, usually for a year or more after their employment ends, either voluntarily or involuntarily. Non-compete agreements often don’t include a list of the companies considered competitors.

Non-compete agreements are enforceable in Massachusetts and most other states (list below), but not in California or India. In China and many developed countries, employers are required to pay at least partial compensation during the time that a former employee is restricted in where they can work.

More info can be found in the Media Coverage links above, and in the OnPoint show Sign Here, And Stay Here from NPR.

Are non-compete agreements really enforceable?

Yes, in most states except California, and they can block employees from successfully changing jobs in a couple of ways without a court even finding that the employee has violated the noncompete:

  1. Chilling effect: Employers may avoid hiring an applicant who’s signed a noncompete in order to avoid any risk of a lawsuit. This can happen even if the job isn’t in a competing group or division. Some job applications include check boxes asking if the applicant has signed any noncompete.
  2. Injunction: After an employee takes a new job, their former employer can ask a court to issue an injunction preventing them from working at their new job pending a decision in the case. The new employer is often unwilling to defend the new employee following an injunction, or keep the position open while the case is decided. The new employee can be fired without cause, or for not disclosing a noncompete, even if the employee forgot or wasn’t aware they’d signed one.

Nationally, there’s been a 60% increase in court decisions over non-compete agreements since 2002 (WSJ). In one Massachusetts court (the Business Litigation Session), over the past five years employers were almost twice as likely to obtain preliminary injunctions enforcing non-compete agreements as they were in the 10 years before that.

More info can be found in Massachusetts attorney and law professor John Bauer’s in-depth talk, Are Non-competes REALLY Enforceable?

How can forming a pop-up employee association help me get out of my non-compete agreement?

“Because EARN’s ‘pop-up unions,’ organized under the National Labor Relations Act, are designed to only engage the company on one issue and then dissolve, companies would rather negotiate and move on than deal with the creation of a full-fledged union in its midst…” (from The End of the Noncompete Clause in the Harvard Business School Alumni Bulletin).

Any group of two or more non-supervisory U.S. employees can trigger an election to certify a pop-up association to bargain on behalf of its members to eliminate their non-compete agreements, if at least 30 percent sign a membership petition, as long as the employees qualify as a “bargaining unit.” A qualified bargaining unit is determined by the National Labor Relations Board (NLRB) “on the basis of a community of interest of the employees involved.” For example, the NLRB has determined that approximately 30 cosmetics counter workers at a single Macy’s store qualified as a “micro” bargaining unit.

Non-supervisory employees have a right to organize, as well as discuss work-related issues such as non-compete agreements, wages, benefits, and working conditions, all without retribution under the protection of the NLRA.

How do we get started?

It’s easier than you may think. Starting a pop-up employee association can be like starting a club. You don’t have to incorporate, or register as a non-profit.

Your association’s initial objective should be to gather qualifying signatures from the members of a qualified bargaining unit. Your closest NLRB regional office can help you determine what group(s) of employees would qualify as a bargaining unit. You can also search online for “labor law firms” in your area that represent employees. Feel free to contact us, but note that we’re volunteers, not attorneys, and can’t provide legal advice.

The NLRB requires signatures of 30 percent of the employees in a bargaining unit in order to hold a certification election. However, standard practice is to gather signatures from 50-60% of a unit’s employees to provide assurance that a majority will vote to certify the association in an election.

How can we gather signatures to trigger an election to certify a pop-up employee association?

See the example of EARN-TEE’s online signature form. Detailed requirements are in the NLRB electronic signature guidelines.

The NRLB requires valid petition signatures from 30 percent of the eligible employees in a qualified bargaining unit, in order to authorize a vote by the employees in that bargaining unit on whether to authorize a pop-up association to represent them for the purposes of jointly negotiating with their employer.

How does EARN's tactic benefit from U.S. labor law?

EARN’s approach follows the rules laid out in the NLRA, which require gathering signatures for a representation petition.

However, pop-up associations adopting EARN’s approach seek to negotiate with employers solely over the issue of non-compete agreements. It’s typical for employee organizing efforts to be triggered by a single workplace issue. Often employers will seek to resolve that issue in order to reduce the incentive for employees to join a union. If the employer eliminates non-compete agreements for its employees in hopes of stalling a signature-gathering effort, the effort will have succeeded.

What if an employer refuses to negotiate with an employee association over a noncompete?

Unlike traditional unions, which may use indefinite strikes as a negotiating tactic, pop-up employee association members may prefer to take any work actions only outside of regular work hours. They may jointly decide to consider work actions limiting work-related activities only during specific weekends or evenings. For example they may agree not to respond to work-related communications over a weekend.

How could work actions limited to evenings or weekends be effective? Because non-compete agreements arguably don’t really matter much to many employers. Many of the employers most strongly opposing non-compete reform in states such as Massachusetts hire substantial numbers of employees in California or India, where non-compete agreements are unenforceable, or in countries where employers are required to pay compensation during the time that a former employee is restricted in where they can work.

Can my employer take or threaten adverse actions against me for organizing a pop-up association with my colleagues at work?

It’s unlawful for an employer to “interfere with, restrain, or coerce employees in the exercise of their rights.” Employers are prohibited from “threatening, interrogating, or spying on” employees, or offering them incentives not to associate. However, these protections under the NLRA don’t extend to supervisors.

If you experience or observe violations by an employer or its representatives, document the circumstances and contact your closest NLRB regional office.

If a non-supervisory employee is terminated for exercising their rights under the NLRA, they can file a complaint with the NLRB, who will pursue their case for them without the need for the employee to hire an attorney. The employee is entitled to reinstatement and reimbursement of lost earnings, but cases can take a long time to be resolved. However, in some states, including New York, the non-compete agreements of employees terminated without cause can’t be enforced.

Which states will enforce a non-compete agreement?

Courts in these states will enforce non-compete agreements that are governed by, and conform with, the laws of that state, or can be revised to conform. For state-by-state details see the 50-state noncompete chart from Beck Reed Ridden: Alabama • Alaska • Arizona • Arkansas • Colorado • Connecticut • Delaware • Florida • Georgia • Hawaii • Idaho • Illinois • Indiana • Iowa • Kansas • Kentucky • Louisiana • Maine • Maryland • Massachusetts • Michigan • Minnesota • Mississippi • Missouri • Montana •Nebraska • Nevada • New Hampshire • New Jersey • New Mexico • New York • North Carolina • Ohio • Oregon • Pennsylvania • Rhode Island • South Carolina • South Dakota • Tennessee • Texas • Utah • Vermont • Virginia • Washington • Washington, DC • West Virginia • Wisconsin • Wyoming

What is EARN-TEE for Dell EMC employees?

Dell EMC employees should see EARN-TEE’s page and signature form.

Bonus question: What profession is exempt from non-compete agreements in the U.S.?

Answer: Lawyers.

While some attorneys representing employers are among the most outspoken opponents of noncompete reform legislation, attorneys as a profession have successfully advocated to be exempted from noncompetes in all 50 states.

Some insight into their conflicting interests comes from the New Jersey Law Journal: “It’s not only the substance and effect of non-compete agreements, but also disputes over where and how to adjudicate them, that breeds litigation, and thus work for attorneys.”

The state court rules exempting lawyers from noncompetes are based on American Bar Association Model Rule 5.6, which had its origin in 1961, initially based on “the unreasonable restriction of the right of the attorney to practice law” according to the Saint Louis University Law Journal. The justification morphed over time into “the client’s right to choose counsel.”

What Others are Saying about EARN and Non-Compete Agreements

IEEE‘s Worcester (Massachusetts) Section supports EARN’s efforts to reduce the burden of noncompetes on Massachusetts technology professionals. Noncompete agreements lower the Massachusetts technology workforce’s ability to respond to changing market conditions, and thereby reduce the flexibility and competitiveness of the Bay State’s economy. These agreements can have a chilling effect on individual professionals’ ability to pursue careers they have studied hard and invested to achieve. A one year noncompete is equally damaging as it makes it impossible to maintain career continuity or to pursue a bona fide offer in a similar field. We would support specific intellectual property exclusions to protect corporate trade secrets rather than blanket restrictions on responsible professionals.” – C. Vernon Gaw, Chair, Worcester County Section, IEEE

“We applaud EARN’s efforts to negotiate to eliminate the noncompete agreements in its members’ employment contracts. We’ve offered our advice to help make this new model for negotiating noncompetes successful.” – Greg Junemann, President, IFPTE