This challenge considers the human resource policy of asking new hires to sign a noncompete agreement.

Noncompete agreements (NCAs) are “employment provisions that ban workers at one company from going to work for, or starting, a competing business within a certain period of time after leaving a job.”²⁷⁶ In other words, the agreement prohibits the person signing it from working with another company that could be viewed as a competitor. The concept was born from the idea that when employees leave an organization, they might take trade secrets and other important information and use it to help a competitor gain a competitive advantage.²⁷⁷

Critical Intervention Services (CIS), a private security firm in Florida, sued Michael Kenny for violating a noncompete agreement after Kenny worked as a security guard for the company for 13 days. Shortly after starting the job, the veteran and single father was unable to find child care during his 7 p.m. to 7 a.m. shift.

Kenny alleged that when he asked for a different shift,

the company told him to either work his assigned shift or quit. CIS alleged that Kenny “went to work, not only for a direct competitor, but for an existing CIS client,”

and that he now had specialized security knowledge from the training he had participated in.²⁷⁸

Jessica Bell signed a noncompete agreement in a

“stack of paperwork” she received when she joined Citrix software company in Raleigh, North Carolina.

Bell got wind of potential layoffs at Citrix about two years into the job and began searching for employment with other companies. She took a position with Egnyte,

a Silicon Valley–based tech firm that had recently opened a sales office in Raleigh. A few weeks into her new job, Bell and six other former Citrix employees working for Egnyte received letters from Citrix informing them that they were violating the noncompete clause. Egnyte filed suit against Citrix, asking that the court rule the noncompete agreements were overly broad and therefore unenforceable.

Citrix countersued Egnyte and the seven employees,

stating that Egnyte had hired the former Citrix workers

“in order to engage in unfair competition with Citrix.”

Egnyte vowed to foot the legal bill for all seven employees and maintained that it hired them on the basis of talent, not to steal Citrix’s intellectual property or customers.

Bell said, “I certainly didn’t think this would have implications and that they would have any control or power over my ability to feed my family essentially after I left Citrix.”²⁷⁹ She noted an obvious misunderstanding about what she was agreeing to when she signed Citrix’s noncompete clause.

The incidence of noncompete lawsuits has nearly tripled since 2000, and their legality varies by state.²⁸⁰

About 20% of U.S. workers have signed such agreements. Noncompete clauses have even extended to lower-level jobs; approximately 14% of employees who make less than $40,000 a year are bound by them.²⁸¹

Questions Should companies be allowed to force employees to sign noncompete agreements?
1. Of course. Every company needs to protect its proprietary and confidential information.
2. In moderation. I agree that it makes sense to protect proprietary information like formulas, equations, trade secrets, and intellectual property for certain occupations or industries. But this should not apply to all jobs, such as working in a sandwich shop.
3. No. They should be against the law because they prohibit people from finding employment.
4. Invent other options. Explain.