June 24, 2011
As an employee are you getting job offers from the competitor down the street? Will the station come after you if you leave? As an employer do you worry your top salesperson is going to walk out one day and take all of her great relationships down to your biggest rival? Do you have the time and money to go after that salesperson if she does jump ship? The big question is, does that non-compete you both signed back when your relationship started have any enforceable bite? Those questions from Radio Ink readers and recent events in Chicago led us to throw a non-compete question at attorney John Garziglia.
PLEAE NOTE: John Garziglia is not giving readers free legal advise in this column. You should always seek the opinion of your own attorney.
The question from Radio Ink is ?I'm interested in another point of view when it comes to non-compete issues. Are they enforceable? ?
John Garziglia says: This is a topic upon which I could write a law review article, but I would put you to sleep after the second paragraph.
The enforceability of non-competes is an area of law that is so fraught with disparate statue statutes and fact specific determinations that the most that can be generally said about the enforceability of non-competes is maybe. Your question does not indicate whether an employer or employee is asking the question, which broadcast station position the inquired about non-compete covers, does not state the length of time for the non-compete restriction, and what geographic area is to be restricted. All of these facts and more are relevant to any commentary on whether a particular non-compete might be enforceable.
Let?s take non-competes first from the employee?s perspective. Before accepting any position with a new employer, ask if you will be asked to sign a non-compete as a condition of commencing employment. Whether or not you will be asked to sign a non-compete should be one of the essential details of your employment, like the description of the position and compensation, that should inform your decision as to whether or not to accept the offered position.
Sure, you as a new employee could decline to sign a non-compete that is put in front of you on your first day of employment but how likely are you to do that? Once an employee agrees to a non-compete, even if its enforceability is questionable, it is likely to affect subsequent employment decisions as the employee or a future employer will be unlikely to spend the time and money to go to court to try to overturn a non-compete.
If you as an employee believes that a non-compete will have a significant effect upon your future employment prospects because you wish to remain in the same area for family or other reasons, it may make sense to have an attorney or agent actively assist in negotiating and narrowing down whatever non-compete you are asked to sign. From an employee?s standpoint, if a broadcast station wants you enough, it may be flexible in whatever non-compete you are asked to sign as a condition of employment, provided the non-compete is negotiated before employment is accepted rather than when you are ready to depart for a better position.
From the employer?s perspective, a variety of state statutes and court decisions control whether or not a particular non-compete agreement will be enforceable. Absent a prohibitory state statute, courts will generally uphold non-competes that are reasonable in time and geographic restrictions as long as they serve to protect a legitimate business interest.
As an employer, you can certainly have employees sign non-competes that have questionable enforceability to try to throw a scare into potential defectors. But, it will be the star employee you lose to your cross-town competitor that will make you rue the day that you threw together a form non-compete based upon what you found on the web or got from a broadcaster buddy. If you as an employer want to do a non-compete that is enforceable, then seek legal advice for that non-compete from a attorney practicing in this area of law in the jurisdiction in which you may one day seek to enforce the non-compete restrictions.
For both the employee and employer interested in the enforceability of broadcast station non-competes, start by researching whether such non-competes are even enforceable in your particular state. Massachusetts and New York are two states that immediately come to mind as prohibiting many broadcasting industry non-compete agreements. But, employers can sometimes get around even tough restrictions on non-competes with creative contract writing. For instance, do a Google search on ?Why Can't Howie Carr Change Employers?? for an example of such contract creativity. And, if you really want to know about non-competes, there are many law review articles and court cases that will provide extremely relaxing bedtime reading.
Leave your comments below.
John F. Garziglia is a Communications Law Attorney with Womble Carlyle Sandridge & Rice in Washington, DC and can be reached at (202) 857-4455 or jgarziglia@wcsr.com. Have a question for our "Ask The Attorney" feature? Send to edryan@radioink.com.
(6/24/2011 9:54:20 AM)
Irrespective of enforceability issues, there's value to an employer in a non-compete. First, a competitor may decide to not hire someone who's hiring may lead to an expensive, time consuming legal battle. Second, an employee may agree to negotiate an exit that protects the current employer's business, while leaving the employee free to join the new employer immediately (e.g. agreeing to not sell to his current accounts for a six month or one year period)
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