You sign the non-compete, satisfied with the cash and stock offer. Then, a year later, you're lured to a rival firm 15 minutes away. Neatly settled in your new Aeron chair from Herman Miller and sipping a Mountain Dew, a letter arrives from your previous employer's attorney, triggering a court hearing. Thankfully, Target is hiring cashiers. But as the United States becomes more litigious and many courts uphold companies' rights to protect itself against competitors, you'll see more non-competes.
Slaughter notes that a lawyer's hourly rate affects the ultimate cost of litigation.
Where it all began Covenants to not compete were frowned upon for centuries, largely because of the nature of work. Back when grandpa was a lad, people who apprenticed in one profession stayed with it for life. Any effort to bar people from working for another company made it impossible to work at all. Thus, courts ruled that such efforts were bad public policy. But that changed in the 1940s, says Slaughter, as courts held that companies sometimes had legitimate reasons to stop employees from potentially aiding a competitor.