Who in the hell wants the burden of being laid off then having to move out of the city or state?
If it’s the best of times, or the worst of times, chances are noncompete clauses are in the conversation. The clauses, which can bar an employee from working for a competitor after leaving a company, rise in prominence anytime workers start shuffling around. Rumblings about noncompete clauses were last heard in 2002. The economy was rebounding after the Sept. 11 terrorist attacks, and workers started finding new work.
Today, with unemployment running high, more workers than ever are clocking out for the last time and challenging noncompete clauses. Overall, corporate litigation is expected to go up in the next year: A Lawyers Journal survey earlier this month found 42 percent of corporate counselors anticipate an increase in legal disputes. Local law firms say the job bust is creating a boom for noncompete cases. The Cranberry law firm LynchWeis has seen more cases involving noncompete clauses in 2009 than in any of the past seven years. Noncompete clauses become a hot topic in a cold economy for two reasons. With less money going around, “now companies are going after every dollar,” said Daniel Lynch, a partner at LynchWeis. In flush times, companies are more lenient with wayward employees. But now, every client counts as competitors scrounge for possible revenue.
“The buzz used to be that these clauses weren't enforcable,” said Joseph Weis, a partner at the Cranberry firm. “That led to a call for more narrow clauses that are more enforcable.” Noncompete clauses are becoming more important as part of the hiring process. Companies, aware of the unprecedented demand for jobs, can leverage a noncompete clause as part of the negotiating process. “When you know people are anxious to get a job, you can say, 'There's going to be a noncompete, and it's going to be a tough one,'” said Jim Carroll, an attorney at the Downtown employment law firm Rothman Gordon. If that causes employees to walk away from an offer, employers can rest assured that layoffs and downsizing are creating many other applicants willing to accept stringent demands, he said.
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